The Post Office network will collapse unless State support is provided urgently, according to an independent review by business advisers Grant Thornton.

The report, commissioned by the Irish Postmasters' Union, recommends an annual Public Service Obligation (PSO) for the Post Office network of €17m.

It says the network continues to provide an economic and social return to communities, far in excess of the PSO requirement.

The report warns starkly of the need for this action to be taken within months as the network "faces significant levels of unrestrained closures by the end of 2021".

"The Irish Post Office Network is at a critical juncture. The financial viability and sustainability of the network is challenged like never before in its history," the report said.

"Many local Post Offices, large and small, urban and rural, will likely be forced to close if the financial conditions under which they operate do not change in the short-term," it added.

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The report says that PSO models for Post Office networks are not unusual and have already been introduced in the UK, France, Spain, Belgium, Italy, Finland and Poland with the approval of the European Commission.

The study recommends that Ireland now follow this model.

In a statement, An Post said both of its networks - the delivery network and the Post Office network - are performing very well through the Covid-19 crisis.

It said it recognised that postmaster incomes and footfall into post offices have come under increased pressure during the pandemic and is working with Government to restore these.

Any subsidies for independent postmasters is an issue between Government and the postmasters, it added.

An Post earlier this year announced its third year of profit and revenue growth.