Post office owners in Oxfordshire are being offered money to close down, move or redevelop as part of a sweeping re-organisation.

It is thought 3,000 of the UK's 9,000 post offices could close in the move, announced yesterday by Consignia.

Letters were sent to sub-postmasters in Oxford and surrounding towns asking them whether they would like to close, relocate, redevelop their office or use their compensation to buy another one.

Consignia said many post offices were struggling to survive and in many areas there were two or more within a short distance. It said there were too many branches. The post office network is losing an estimated £100m a year on total sales of £1.2bn. It is set to lose a further £400m a year when benefit payments are made into bank accounts instead of through order books at post offices, which will reduce a branch's turnover by 41 per cent on average.

There are 206 sub-offices in the OX postcode area, including rural branches which are not under threat.

Sub-postmasters are expected to be offered two years' wages to quit or grants of up to £10,000 to invest in their businesses. This will be spent improving facilities, such as access for the disabled. Longer opening hours are also being promised. Consignia said it may not be able to honour every owner's preferred option and may have to force people to move offices or close, although a spokesman said the latter course of action was unlikely.

"It is a reasonable offer and there will be people out there who want to take it," he said.

But a number of sub-postmasters said they had no intention of closing and did not believe that they would have to shut.

Ash Pandya, 62, who runs St Clement's Post Office, in Oxford, said: "Customers are already worried that we may shut but I have no plans to close or move. "I love my job, that's why I haven't had a holiday for nine years, and although there are two post offices nearby, half of my business is reliant on the post office side.

"I think that there will be many businesses who struggle to survive if their post office is removed."

Shiv Singal, of Wood Farm Post Office, in Headington, said: "We're not thinking of closing down as business is good and we've had a manager come in who says that people will not be forced to shut." And Jan Sanderson, of Botley Post Office, said: "I've not had a chance to read the letter and study the implications but this is a very, very busy office and I don't think it's likely that we'll be forced to shut. I think that the ones which are in trouble will have closed already."

Consignia says that it is likely that small businesses which are part post office and part retail will move completely while in larger stores just the post office will move.

Alan Barrie, Executive Director of Post Office Ltd, said: "In many towns and cities there are simply too many Post Office branches for the number of customers. "Customers can rest assured that even after these changes, more than 95 per cent of people in urban areas will still live within a mile of the nearest branch and the majority within half-a-mile."

Consignia says that it may take up to two years to sift through response forms from sub-postmasters which will state their desired option.

The reorganisation is backed by a £270m Government grant to modernise the Post Office network. Derrick Millard, Oxfordshire representative of consumer watchdog Postwatch, said it was government policy to make sure 95 per cent of people lived within a mile of a post office.

He said: "This is a government policy. Our job as Postwatch is to make sure Post Office Counters comply with this so there are no great gaps between post offices.

"We will be watching that very closely."