The Post Office has retained its five-year contract to provide customers with the Post Office Card Account after a two-year wait.

The contract had been put out for tender by the Government in December 2006, with payment provider PayPoint a strong contender to take the account.

But the Secretary of State for Work and Pensions, James Purnell, said the contract should stay with the Post Office.

“The card account is an important source of income, and brings customers through the doors of post offices across the country,” he said.

“Now is not the time for the Government to do anything to put the network at risk, particularly as post offices are often the only providers of financial services in remote areas.”

The news sent shares in PayPoint tumbling 9% to close on 529p. The company said it was “disappointed” by the decision.