The Post Office has agreed to extend its deal to use the controversial Horizon IT system for another year.
It is paying a further £41m to the Japanese-owned company Fujitsu to use Horizon until March 2027.
The accounting system has been at the centre of the Post Office scandal in which more than 900 sub-postmasters were wrongly prosecuted after faulty Horizon software made it look like money was missing from their branch accounts.
A Post Office spokesperson said it was “committed to moving away from Fujitsu and off the Horizon system as soon as possible”.
“We are bringing in a different supplier to take over Horizon whilst a new system is developed, and this process is well under way,” they added.
“We expect to award a contract for a new supplier to manage Horizon by July 2026, according to current timelines.”
Sources have told the BBC the contract could be extended until 2028 while the new supplier takes over the running of Horizon, which is used by sub-postmasters at branches across the UK.
But the replacement of Horizon is still a long way off.
The Post Office had been working on a project called NBIT to build a new in-house alternative, but there were growing concerns about its soaring costs and complexity.
NBIT was ditched shortly after new Post Office chair Nigel Railton launched his turnaround plan for the business in November 2024.
Post Office bosses have shifted to buying software from external suppliers and a procurement process for this has begun.
A government spokesperson said: “We are working as quickly as possible to ensure the Post Office has the technology it needs, including replacing Horizon, as a vital part of the company’s wider transformation.
“The fact they still use the Horizon system indicates past under-investment, which can’t be rectified overnight, so we need to ensure postmasters have the tools they need to continue serving their customers in the interim.”
Fujitsu executives have apologised for the company’s role in the scandal, admitting that Horizon had bugs errors and defects from the start.
The boss of its European arm, Paul Patterson, has acknowledged that Fujitsu had a “moral obligation” to contribute financially but no timeline or figure has so far been set.
