The government has undervalued the Post Office network as a link with citizens, according to a committee of MPs.
The Business and Enterprise Select Committee also said the government's response to an inquiry aimed at saving post offices had been "inadequate".
Committee chairman Peter Luff argued that there was "no reason why the network cannot flourish again".
Business Minister Pat McFadden said the Post Office was in good health but "cannot survive on nostalgia".
'Narrow focus'
The committee was asked by the the government to study how the network could be improved, but, according to the report, "most departments failed to suggest any way in which they might use the post office network".
The report said it would be "easy" to compose a list of services that could be made available through post offices, such as provision of government forms, payment of fines and applications for energy-saving schemes.
It also said the government had exacerbated the problems faced by post offices by moving services online.It is bizarre that government policy recognises the value of the network, but that individual departments do not see that they have a role
Business and Enterprise Select Committee report
"The committee is profoundly disappointed by the narrow focus of departmental concerns and the lack of attention to citizens' needs displayed in many of the answers to our questions about departments' use of the post office network," the report said.
"It is bizarre that government policy recognises the value of the network, but that individual departments do not see that they have a role in making sure that everybody, not just the web enabled, has access to their services, and that taking this seriously by using the post office network more could contribute to wider policy aims."
'Political will'
The report criticised the fact that the earnings of many postmasters were below the national minimum wage.
http://news.bbc.co.uk/1/hi/business/8138198.stmGeorge Thomson, National Federation of Subpostmasters: "This report must be implemented"
Mr Luff said the network could be revitalised "given sufficient political will from both central and local government".
He added: "The government's support of £150m per year is welcome, but it is absurd to be paying this each year to support a post office network which offers limited services when it could simply pay the network to offer services people actually want."
But Mr McFadden said the government had already awarded the Post Office the new card account contract for benefits and pensions, as well as the new contract for driving licence renewal.
He added: "We are absolutely clear that identifying new opportunities and new ways of doing business are the key to ensuring a positive long-term future for the post office."