SALISBURY'S main Post Office building could soon be turned into a hotel, residential flats and shopping arcade, the Journal has discovered.

The news is a worrying development following a Department of Trade and Industry Report, published today, which outlines how the Post Office might have to close more than 7,000 branches across the UK to halt mounting losses.

The Salisbury branch, which was franchised out by cash-strapped Post Office bosses earlier this year, has been housed in Castle Street for more than 100 years, and provides a number of key services to Salisbury residents.

However, the franchisees, Dorchester-based Counter Management Ltd, have placed adverts in hotel and catering trade magazines inviting offers to develop the Grade II listed buildings and turn them into, among other things, a 50-70 room hotel.

Those that respond to these adverts are sent plans that provide outlines showing how the Post Office building and adjoining vacant lots along Castle Street could be refurbished or, in the case of 28 Castle Street, demolished and rebuilt, to fit in with modern day commercial needs.

These plans estimate the lots can provide a hotel, four residential apartments, and a number of ground-floor retail units, by the summer of 2008.

Such a development is, however, still in the early stages and no formal applications for redevelopment has been made to Salisbury district council or the Post Office central office.

Post Office spokesman, Tom Prendergast, said: "Any alterations to the service provided by franchisees have to be passed by the Post Office first but, as yet, we have received no formal application from the franchisee stating they wish to make alterations to the building in Castle Street.

"However, the Post Office wishes to state we are fully committed to maintaining services in Salisbury, both now and in the future, so any alterations will have to be very carefully considered."

As part of the franchise agreement, Counter Management Ltd is allowed to develop the buildings in any way they see fit, but it is a condition the provision of Post Office services must not be affected.

To this end, the plans propose the Post Office counter service will be moved to the smaller, and currently vacant, building at 26 Castle Street.