The Royal Mail has told Government ministers that half of Britain's 14,500 post offices should be shut to stem mounting losses, it is reported.
But the Government is likely to propose that a fifth - between 2,500 and 3,000 rural and urban branches - be closed down, according to the Times.
Controversy over plans for reforming the network has been growing in the run up to an announcement by the Department for Trade and Industry expected on Thursday.
Royal Mail has previously claimed that about 4,000 post offices nationwide would be the optimum "commercial" level, although chief executive Adam Crozier has accepted their social benefit must also be taken into account.
Currently the network, which comprises about 8,000 rural and 6,500 urban branches, is said to make an operating loss of £2 million every week - subsidised with £150 million annually from the Treasury.
Ministers have been criticised for exacerbating financial problems by withdrawing key contracts such as the Card Account.
Any cuts are likely to be phased in over a number of years.
Kate Hoey, Labour MP and chair of the all-party group for sub-post offices, said: "MPs of all political persuasions would be up in arms if cuts of this scale were to happen."
A DTI spokesman confirmed an announcement would be made this week, but insisted nothing would be confirmed before then.
"We recognise the wider social role of the post office in communities. But also there is widespread recognition that the current size of the network is unsustainable."
Read More
MORE ABOUT