The Post Office has agreed to hand over about 75 Crown post office outlets to WH Smith under a franchise deal likely to come under attack from unions.

The agreement, expected to be announced alongside Smith’s interim results today, will affect an estimated 1,000 workers.

The Post Office agreed to transfer six Crown post office outlets to WH Smith last year and the arrangement has been on test since autumn.

That move was criticised by the Communication Workers Union as “blatant privatisation” and the latest agreement is likely to face severe criticism and threats of strike action. The transfer of the 75 post offices by the end of next year is also likely to anger the main Post Office workers’ union amid crucial pay talks.

Under last year’s arrangement, post offices were closed and staff offered voluntary redundancy or other jobs within the Post Office. Some were able to apply for jobs within WH Smith, which took up a franchise to offer the full range of post office services, including car tax, foreign exchange, passport applications and cheque-cashing facilities. The latest deal is expected to be similar.

There are 14,300 Post Office outlets in the UK, but most are sub-post offices. There are 458 Crown offices, managed directly by Post Office Limited.

The Crown network is losing £70 million a year and the Post Office has been closing outlets and seeking other ways to raise profitability in recent years.

Among Crown post offices affected are those in Swansea, Shrewsbury, Slough, Hammersmith, Ashton-under-Lyne and Llanelli. WH Smith sees the venture as a way of attracting new, regular customers and using excess space in its stores.

Kate Swann, chief executive, has been trialling various ways to use WH Smith’s store space more effectively, including the establishment of coffee shops.

WH Smith, which operates 545 high street stores and 260 travel outlets at railway stations and airports, is expected to report a 4 per cent rise in underlying profits to £57 million when it reports interim results today. Underlying sales continue to decline amid rising competition from supermarkets and online stores, but Ms Swann’s strategy of cost-cutting and altering the mix of products is improving profit margins.

In January, WH Smith said that its high street stores had recorded a 9 per cent fall in underlying sales in the 20 weeks to January 20, but that was offset by strong growth at shops in airports and stations.

Ms Swann, the former head of Argos, in 2004 set out a three-year to five-year scheme under which she has sold WH Smith’s American and Far Eastern stores and Hodder Headline, the publisher. In September, Smith’s retail chain was split from its news distribution arm, now listed as Smiths News.

Both WH Smith and the Post Office declined to comment.

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