The Communication Workers Union (CWU) has called into question the legality of a proposed funding agreement between the National Federation of SubPostmasters (NFSP) and the Post Office.

The agreement, which would see the Post Office provide funding of the day-to-day running of the NFSP of up to £1.5m a year, plus at least £1m a year in grants, was voted for by NFSP members at a conference in Birmingham last week.

It was chosen in favour of options to merge the NFSP with the CWU or NFRN.

An NFSP spokesman told RN that members were shown a Memorandum of Understanding (MoU) containing the “principles” of the agreement – but that the actual agreement was kept private as it was commercially sensitive.

CWU Postmaster Branch national secretary Mark Baker said he would be calling for “political and legal scrutiny” of the agreement.

“Grant funding agreements cannot be contractual in their nature, they can’t be for a specific period and they can’t tie the receiving end down to a particular course of action,” he said.

Proposed terms outlined in the MoU said the agreement would last 15 years and the NFSP would be responsible for representing and supporting all post office branches, with particular focus on strengthening retail offers.

Mr Baker questioned whether the agreement was a contract “dressed up as a grant”.

“We have taken legal advice and we will eventually be sharing that with the Post Office if it doesn’t show its hand.”

We have taken legal advice and we will eventually be sharing that with the Post Office if it doesn’t show its hand

NFSP general secretary George Thomson said the agreement was a “major step forward for the relationship between subpostmasters and the Post Office”.

“This decision will ensure that subpostmasters across the UK continue to have strong representation and receive the support they need,” he said.

But subpostmasters raised concerns over the NFSP’s future independence.

Sandra Tizzard, of Puriton Post Office in Somerset, said: “The fact that it will be financially dependent on the Post Office means it will no longer be independent and truly able to represent and support subpostmasters.”