The Post Office has cut the size of the compensation pot it set aside to pay branch managers wrongly convicted of theft and false accounting by half.
Its annual accounts show it has now set aside £244m, down from £487m last year.
Between 1999 and 2015, more than 700 Post Office staff were convicted when faulty software made it look as though money was missing from their sites.
A call has been made to quash all convictions due concerns over the small number of cases being overturned.
The Post Office Horizon scandal – named after the faulty accounting software – is one of Britain’s most widespread miscarriages of justice.
The convictions of hundreds of postmasters and postmistresses for false accounting and theft resulted in some people going to prison.
To date, 93 convictions have been overturned and, of those, only 27 people have agreed “full and final settlements”.
Meanwhile, 54 cases have resulted in either a conviction being upheld, people being refused permission to appeal or the person appealing has withdrawn from the process, according to the Post Office.
The independent Horizon Compensation Advisory Board has argued that the smaller number of convictions being overturned highlighted the “current approach is not working”.
In its latest accounts, the Post Office said its much lower compensation figure was “management’s latest and best estimate” of the amount of future claims.
A spokesperson said the new amount had “no bearing on the funding availability or the amount of money which is able to be paid out to victims”.
In order for a victim to claim compensation, they must first have had their conviction overturned.
There are several theories why the number of appeals and cases being overturned is relatively low.
Neil Hudgell, a solicitor who has represented most of the those who have successfully had their convictions overturned, said: “Firstly, a number of people have sadly died. Secondly, people have left the country.
“Thirdly, and probably most frequently, people remain scared to come forward. They are absolutely petrified of the Post Office and what has been done to them over the last 20 years.”
He said: “They are scared of the legal process. We have consistently tried to manage those fears and have successfully done so when people have come forward. However, it remains an ongoing battle.”
Professor Chris Hodges, chair of Horizon Compensation Advisory Board, said in a letter to the government an unwillingness to appeal was due to a “deep distrust of authority”, evidence being lost or destroyed and issues with compensation if a Post Office manager is not granted a retrial.
Nick Wallis, journalist and author of The Great Post Office Scandal, told the BBC’s Today programme courts were “working on the basis on Horizon being essential to a prosecution”, and not seemingly taking account of the “huge failures” of Post Office management and prosecutors.
“So unless you can prove Horizon’s essentiality in your prosecution, then you are unlikely to get your conviction overturned,” he added.
The Post Office prosecuted 700 sub-postmasters and sub-postmistresses – an average of almost one a week – between 1999 and 2015 based on information from a computer system called Horizon, which was used by branch managers for accounting.
Some went to prison following convictions for false accounting and theft. Many were financially ruined and have described being shunned by their communities. Some have since died.
Last week, Prof Hodges said the convictions were “unsafe not only because they relied on the Horizon computer evidence, but also because of egregious systemic Post Office behaviour in interviews and pursuing prosecutions”.
“This led to guilty pleas and false confessions, driven by legal advice to victims to minimise sentences, and by the psychological pressure of dealing with an institution systematically disregarding the truth and fairness,” he said.
His board therefore decided the only viable approach was for all Post Office-driven convictions over the Horizon period to be overturned, so that the victims of the scandal could be receive compensation.
Nick Read, the Post Office’s chief executive, said in its annual accounts that “any suggestion that today’s Post Office is deliberately placing obstacles in the way of that outcome is wholly misplaced”.
He said: “Set against the processes and procedures we have to follow to both secure the necessary funding from government for compensation payments and to make them, we have made good progress.
“We will not rest until justice is achieved, and full and fair compensation paid, for all those so badly affected by the events of the past.”
A Post Office spokesperson added it encourages “people who believe they were wrongly convicted, for any reason, to consider an appeal”.