A Gipsy Hill post office which many believed would avoid the axe will in fact close.

The Gipsy Road post office was one of seven post offices handed a lifeline last month when the Post Office ordered a review into whether it should close.

But the company announced today that the branch will join another 176 post offices in London which will have post offices services scrapped.

The closure will be a big blow to a community which rallied round the campaign to save the branch led by its sub-postmaster Niranjan Francis and Dulwich and West Norwood MP Tessa Jowell, with more than 2,500 people signing a petition.

Mr Niranjan said he was devastated at the news but admitted it was what he feared after receiving negative feedback from the Post Office during the review process.

He said: "It is a really shame and a big loss for the community. I would just like to thank everyone who gave us so much support, we all gave a good fight."

"This is a very successful post office which is very important for the community it serves but the review has not seen that," he added.

Mr Francis insisted throughout his campaign that closing the branch, which made profits of more than £50,000, would have a devastating effect on the community.

He argued many of his customers were elderly and would find it difficult to reach or park at the next nearest branch.

The sub-postmaster and Tessa Jowell told mail bosses the area surrounding the post office in Seeley Drive in Sydenham Hill was very hilly and poorly served by buses from the West Norwood and Gipsy Hill area.

But Mr Francis said the arguments "had fallen on deaf ears."

Ms Jowell said: "It is extremely disappointing that the Post Office has failed to accept the strength of our arguments to retain the profitable and well supported post office on Gipsy Road."

She said she would continue to put the case to see if there is any way the branch could continue to provide postal services.

Mr Francis said he would have sacrificed the six figure sum he will receive in compensation to see the branch saved, but now he would be spending the cash on expanding the shop where the post office currently stands.

He will also invest in another business Laksha News and Stationary he owns across the road.

He said although the compensation sounded a lot, it was not much more than what he spent on the franchise when he bought it in 2000.