MANY post office owners are gloomy about the future of their industry despite reports of a renaissance, it has been claimed.

Retail business agent Christie and Co, of Newcastle, said the market in post office sales is healthy.

The company said there is a particular demand for post offices with good quality residential accommodation in sought-after areas including attractive villages.

Philip Stimpson, from the firm, said he believed the thriving sector was partly down to a U-turn in Government policy which will allow people to collect benefits in cash rather than have them paid directly into bank accounts.

The company sold 25 per cent more businesses in 2001 than in the previous year, and included Leam Lane Post Office, five miles from Gateshead town centre, which sold off an asking price of £189,000, and Deneside Post Office, in Seaham, east Durham, which sold off an asking price of £155,000.

But Jean Kendall, North-East officer for the National Federation of Sub Postmasters, said she did not believe that there was a renaissance.

She said: "We did lose 740 post offices last year, many in rural areas, where people couldn't sell or the business wasn't viable.

"It could be true and I am willing to be proved wrong, but I have to say I do not know of anyone who has sold a post office for the money they could have made between 1997 and 1999."

She also said she did not think the Government had done a U-turn because it was still the plan to have pensions and allowances paid directly to bank accounts by 2005