More than 140 MPs have withdrawn their support for a mediation scheme set up by the Post Office, following an influx of complaints that the mail service unfairly blamed sub-postmasters for losing hundreds of thousands of pounds of company money.
For several years, sub-postmasters across the country have claimed that they are often used as scapegoats for the company's own IT system failures, which have resulted in hundreds of thousands of pounds worth of shortfalls.
The Post Office has consistently denied this, saying there are no faults in its computer software. But in 2013 investigators discovered defects in the Horizon accounting system in many of the company's branches, leading to the introduction of the mediation scheme.
There are 11,500 sub-postmasters in the UK and none of them are directly employed by the Post Office. They are forced to make up any shortfalls from their own pockets.
More than 140 MPs have been contacted by sub-postmasters since the dispute began, saying that they have lost their homes or been bankrupted.
James Arbuthnot, the MP leading the complaint against the Post Office, sent a letter to the company this morning, in which he accused it of rejecting 90 per cent of mediation applications.
"The scheme was set up to help our constituents seek redress and to maintain the Post Office's good reputation," he said. "It is doing neither.
"It has ended up mired in legal wrangling, with the Post Office objecting to most of the cases even going into the mediation that the scheme was designed to provide."