POST offices which have been hit by massive rises in insurance premiums could benefit from a new £15m government rescue fund.

The Department for Trade and Industry announced yesterday that grants of up to £50,000 will be available to sub-post offices in deprived urban areas for a range of schemes to modernise and expand.

The grant will be spent on new shopping facilities, such as bakeries or greengrocers, updated information technology equipment, alterations or extra security.

Scores of sub-postmasters and postmistresses living in deprived areas, such as South Bank and Eston, on Teesside, are hoping to secure grants and improve security to bring down their insurance premiums.

Dave Scullion, secretary of the Middlesbrough and Cleveland branch of the National Federation of Sub-Postmasters, said his insurance premium had increased by 51 per cent this year after a £250 claim for storm damage to one of his post offices.

He said most sub-postmasters' premiums had risen by at least 30 per cent - even those who had not made a claim.

Mr Scullion said: "If they have added security, we are hoping the insurance will drop, which will help them in the long run.

"The money will make a lot of difference to these sub-postmasters."

The North-East tops the league table of branches in the most ten per cent deprived wards where there are no other post offices within half a mile.

In the North-East, 91 branches fall into this category compared with 86 in Yorkshire and Humber, 12 in London and 33 in the West Midlands.

The Northern Echo launched its Last Post Campaign in response to threats to the survival of hundreds of village post offices in the region, at risk because of plans to have benefits paid directly into bank accounts rather than over the counter.

The change of payment plans will be piloted in Stockton and Dundee next month.

Yesterday, Jean Kendall, executive officer of the National Federation of Sub-Postmasters North-East and sub-postmistress of Wolsingham Post Office, County Durham, welcomed the £15m funding.

But she said: "The point is we wouldn't need to be rescued if the Government hadn't decided to take away the majority of our customers by paying money into their banks."