Small firms have called for a halt to post office closures.

The Federation of Small Businesses (FSB) in Kent and Medway, representing 7,000 enterprises, says that post offices are at the heart of the community and vital for most firms.

Roger House, chairman, said that many of the 2,500 post offices shut last year were in Kent and Medway, and he called for a halt because of the damaging effect closures were having on small businesses using their services every day.

"Post offices are small businesses in their own right and are at the heart of many communities," he said. "Over 80 per cent of small businesses said that if their post office closes, it would have a singificant impact on their business."

But he acknowledged that the present system was not operating efficiently, leaving small businesses "wasting valuable time travelling to another post office or waiting in queues".

The FSB was urging the Government to ensure the UK had a "fully operating postal service to serve the needs of our 4.7 million small businesses".

FSB concern came as the Government was firming up controversial plans to partly privatise the Royal Mail.

A survey of 5,300 FSB members found that 80 per cent depend on Post Offices to send their mail and for other business transactions, while 47 per cent visit the post office a couple of times a week.

Nearly 20 per cent said closures had already had a negative effect on their business, claiming that post handling takes longer because queues are longer. Seventeen per cent said they had to travel further because their local branch had closed.

Nearly half (48 per cent) want the Royal Mail to remain in state ownership, while 27 per cent said they would consider part-privatisation as the way forward if it meant no more post offices would be closed.

The call came on the same day Business Secretary Lord Mandelson confirmed controversial plans to invite private sector investment in the Royal Mail and switch its pension deficit to the taxpayer.

While insisting that it would remain in public ownership, he said the organisation was lagging behind international counterparts and needed to change.

But in a bid to appease Labour and trade union opponents, he said the Postal Services Bill would maintain a six-day-a-week, fixed price universal postal service which was otherwise under threat.

A so-called strategic partner would be a minority stakeholder that brought experience and investment to transforming the Royal Mail.

Lord Mandelson said the Government’s plan was the only credible option to save the Royal Mail, which has been hit by decreasing mail volumes due to the rise of email and online technologies.

"Our policy will keep Royal Mail in the public sector and this legislation makes this clear," he said. "The Royal Mail will run out of money to sustain its current universal, six day service unless its pension fund deficit is solved and its business transformed."

He added: "Royal Mail is lagging behind its international counterparts and this needs to change.

"A partnership must not just bring access to capital, it must bring expertise. A partner experienced in driving forward change in postal companies will help transform it."

The Government will take on the pension deficit which will free the Royal Mail from a £280 million cost of servicing the debt.

Ofcom will regulate postal services "to ensure greater benefit for consumers and place postal services in a broader communications market context".