Ministers have been slammed by MPs for failing to pay post offices the full price of the government services they provide.

A report from the Commons trade and industry committee released on Wednesday found that Whitehall departments are contributing to the decline of crown post offices by selling them short.

With the Department of Work and Pensions' decision to press ahead with direct benefit payments into bank accounts already set to cost post offices up to £400 million per year and "exacerbate" losses, the MPs called for crown offices to be subsidised by the taxpayer.

"The government should be prepared to provide support, at least in the short term, if this proves necessary," committee chairman Martin O'Neill said.

"This is not an unreasonable suggestion, given that the Royal Mail Group as a whole has been a significant contributor to the Exchequer in the past."

And following its investigation into the future of the local services the cross-party committee demanded that the government pay at least the full "economic price" of services such as processing passport applications and vehicle licenses.

"Even if the government is unwilling to provide financial support for the crown offices, it should at least be prepared to pay an economic price for the services that Post Office Ltd delivers on its behalf," O'Neill added.

"The government cannot continue to profess its commitment to a viable post office network for the future while at the same time paying the post office less than the going rate for the job."

Giving evidence to the committee, industry minister Gerry Sutcliffe said the government was committed to the principle of paying the economic price for services, which the report welcomed.

The report also found that Post Office Ltd's target of turning a £71 million annual loss into profit within five years would be "challenging" given the loss of benefit payment income.

The committee also called for an assurance that service standards would not be compromised in the bid to make efficiency gains and the conversion of more crown offices into franchises.