matched, Shadow Finance Minister Grant Gibbons warned yesterday.

Dr. Gibbons said the Post Office was subsidised by just over $1 million in last year's Budget -- a figure which has risen to an estimate of nearly $2 million for the coming year.

And he predicted the subsidy would have to increase in future years -- or the cost of a stamp would have to "go through the roof.'' He stressed he was not attacking the postal service or its staff -- but insisted that action needed to be taken to boost profitability.

Dr. Gibbons said that Postmaster General Clevelyn Crichlow had an "innovative approach'' and that more was needed to be done to help the service catch up with modern trends like e-commerce. Dr. Gibbons said the increased use of automation in mail sorting could lead to job losses.

But he added: "It seems to me unless we start to speed up the sorting procedure, we will be cutting down staff anyway because the Post Office will slowly dwindle down to half its size.

"There are a lot of loyal staff there who work very hard, but unfortunately technology has overcome them.'' Gibbons warns of bleak future for Post Office Dr. Gibbons said the Post Office could tap into the e-mail market by issuing e-mail addresses so people without access to a computer could set up e-mail accounts -- and pay for the use of Post Office computers to send and collect their messages.

And he added that, in the US, postage could be bought over the Internet -- a method Bermuda could also adopt.

He said that the sale of Bermuda stamp issues -- expected to make around $2.66 million in the coming year -- could also be done over the Internet, boosting sales abroad.

And he added that the Post Office could link up with the Bermuda Monetary Authority and have a joint special stamps and coins page. Dr. Gibbons added: "We could take a very interesting approach to that and have interesting e-mail postage scenes of Bermuda or something else.

"We could move fast enough here so we could get into the forefront of some kind of change.'' He said that one of the main problems with getting US Mail in Bermuda was that in wintertime the airlines used smaller aircraft -- and that letters from America were often sent to the UK before arriving in Bermuda, leading to long delays.

But he pointed out that both FedEx and UPS had daily flights into Bermuda -- and that a rental deal for space on their aircraft could be worked out.

And he predicted that e-mail and courier services would continue to make inroads into the profitable services the Post Office provides.

Dr. Gibbons said bill payments were increasingly done by ATM machine or by other electronic methods.

He added: "A lot of first class mail coming and going is going to decline -- that will be one more stream of revenue which will be cut off.