Dozens of rural post offices in the South West could be replaced with limited counter services in garages and shops under government plans to downgrade a fifth of the branch network.

Under changes that will be rolled out from next June, 2,000 post offices – including many in the South West – will be converted into new Post Office Locals, which offer more restricted services from within other commercial premises.

The Government insisted the new model was not an attempt to squeeze rural services, but to make them "more commercially viable".

But consumer watchdogs and rural campaigners said the plans will hit isolated rural communities the hardest.

Customers will not be able to apply for a driving licence, send bulky mail overseas, pay car tax or make cash withdrawals using passbooks – but they may benefit from longer opening hours if the new service is on a commercial premises like a filling station.

Alice Barnard, chief executive of the Countryside Alliance, said: "This is essentially a downgrading of the postal services offered to local communities.

"Isolated rural communities stand to suffer the most from the closures and loss of postal services.

"We are concerned that there has been insufficient public scrutiny of the new model and the effect it will have on people's everyday lives."

The Department for Business, Innovation and Skills, which is expected to take over the running of the post office network from Royal Mail in April next year, defended the plans.

A BIS spokesman said the scheme would make " running a post office more profitable for hard working sub-postmasters".