HUNDREDS more free cash machines face closure across Scotland in the coming years, following fresh warnings from the network responsible for the vast majority of UK withdrawals.

Bosses at LINK insisted they were doing “everything they possibly can” to keep automated teller machines (ATMs) open in the communities where they are most needed.

But they admitted efforts to protect cash machines in remote areas would only be in place for four years and some could still close within that time.

LINK, the UK’s main cash machine network, is cutting the fee paid to operators from 25p to 20p per withdrawal over four years, but previously unveiled proposals to protect ATMs one kilometre or more from the next free machine.

It has led to worries that more than half of Scotland's 5,300 free-to-use ATMS could disappear.

However chairman Sir Mark Boleat admitted these measures would only plug the gap for the next few years, with “bigger issues” looming if the number of people using ATMs continues to plummet.

He also appeared to predict widespread closures in cities, adding: “There are some city centres with 50 pay-to-use ATMs. We don’t think the public will be disadvantaged if that number falls to 40, or even to 30 or to 20.”

Sir Mark said cash use had fallen by 30 per cent in the last 10 years, and was projected to drop by another 40 per cent in the coming decade.

And he insisted “falling demand” meant even protected ATMs could close in the next four years, despite a freeze on the fee paid to operators and additional financial incentives for machines in vulnerable areas.

He said: “If transactions fall by 40 per cent in the next 10 years, 30 or 40 per cent, there are bigger issues and we need to address those. Our own data shows consistently this year transactions have fallen by five per cent below last year.”

In evidence to Holyrood’s economy committee, LINK estimated that up to 11 per cent of the UK’s cash machines may close as a result of the changes to operator fees. But some estimates have put the figure as high as 18 per cent.

Under questioning from MSPs, Sir Mark was unable to provide any breakdown of the impact on Scotland.

But he said 221 ATMs would be protected from fee changes north of the Border.

It came as Professor Russel Griggs, chairman of the new South of Scotland Economic Partnership, told the committee there is no evidence bank branch closures have a long-term effect on communities.

RBS is currently pushing forward with plans to shut at least 52 branches across the country, with a further 10 under review.

Professor Griggs said work he had carried out suggested that while there was initially a “heavy impact”, communities moved on and found other ways of doing things.

He said: "So I think it probably has a short-term effect but the evidence that I saw as I went around and visited probably 20 or 30 places across the whole of the UK looking at this, is that it settles down again and people go back to doing what they used to do but just in a different way and it's interesting they don't tend to move banks."

He said that during recent consultation meetings held with hundreds of people across the south of Scotland in connection with the new economic partnership, bank branch closures had been raised only once.

Thomas Docherty, public affairs manager for consumer organisation Which?, said there was a need for more robust evidence on the long-term effects of closures.

He said: "There hasn't been a proper study done by anybody of what those longer-term impacts would be on the rate of closures.

"By the end of this year in Scotland more than 250 branches will have closed in the last four years.

"I think when you start to get that scale of closures somebody should be stepping up and carrying out that proper investigation.

"The people who are most likely of course to be affected are older customers and customers who are more vulnerable.

"Yes, online banking is growing but only 56 per cent of customers, according to UK Finance, currently use online banking, so what is happening to the other 44 per cent – how are their needs being serviced?"