A community shop and post office has been saved in a 'make or break' meeting after its future was in doubt because of debt.

The shop at Mileham, near Dereham, became a not-for-profit community venture in 2007 but has struggled to stay afloat despite being supported by villagers and passing trade.

A two-year contract with the Norfolk Rural Community Council (NRCC) was struck in 2009 and ended in October.

After the NRCC deal ended, the Mileham Community Interest Company (CIC) – formed in 2007 and made up of five villagers – took back direct management of the business.

Financial negotiations have taken place between the NRCC and CIC over the past three months and it was feared the shop would have to close at the end of the month because of a crippling cash shortfall, according to shop director Paul Kingsley.

But on Thursday, at the NRCC office in Dereham, a strategy to repay the debt was agreed by both parties.

Jon Clemo, chief executive of the NRCC, said: 'We walked away with an agreement that both parties were happy with that should allow the shop to continue to provide the valuable service for the people of Mileham.

'If you look at the vibrancy of a rural community it is dependent on having a hub. Sometimes it can be the shop, village hall or pub. It is very important for the vibrancy that there is something where the community can come together and interact and which helps the service delivery that rural communities have.'

As well as being a post office, the Mileham shop sells everyday groceries and provides a prescription service.

It has a paid manager and assistant manager and is run by eight volunteers from 8.30am to 5.30pm Monday to Friday, 8.30am until 1pm on Saturday and 8.30am until 11am on Sunday.

Nancy Krois, chairman of the CIC said: 'It is a lifeline to people who don't have cars or for elderly people in the village. It saves people getting into their cars and driving to Dereham and Fakenham.

'People have been saying 'don't shut it, we cannot do without it'. It is a boon for the village.

'Hopefully the shop will be able to move on.

'We've got big challenges ahead in making the shop profitable and secure the future.

'There will have to be changes but it's no longer an emergency thanks to the deal.'

The shop serves about 650 people and for years it was not commercially viable. In 2007, owners Mike and Sheila Kidd leased it to the village at a social rent.

Between 2009 and October the NRCC ran the shop through the not-for-profit trading company, Thinking Rural.