Hundreds of free-to-use cash machines are at risk of being closed down on high streets across the UK as a result of proposals being published this week to overhaul the 70,000-strong Link network.

The ideas are being put forward by the board of Link, 10 months after a row over the fees the members of the network charge each other for using cash machines sparked fears that customers could face fresh charges for taking out their cash.

The proposals could raise alarm among consumer groups about the impact of fewer free-to-use ATMs - there are currently 55,000 - on vulnerable customers, particularly at a time when banks are closing branches. They could also provoke more controversy within the Link network.

But John Howells, the chief executive of Link, said while the number of free-to-use machines could fall over time, there would be protections for customers on low incomes and areas of the UK would not be left without ATMs.

The ATM network, which includes 70,000 machines when ones which charge for cash withdrawals are included, costs £1bn a year to run. The proposals have been drawn up after a working group, set up in the wake of the simmering row which erupted in January, failed to reach an agreement. It will be sent to the members of Link on Wednesday.

Link has 30 members - ranging from high street banks and building societies to private companies which install machines around the UK - and the new proposals relate to the “interchange” fee that the card issuers in the network pay to each other and the independent providers when their customers withdraw cash.

This interchange fee is calculated by dividing the cost of running the free-to-use network by the number of transactions and is currently around 25p. It means that high street banks with millions of customers end up with big bills to keep cash withdrawals free for customers.

Howell said the board of Link thought this interchange fee was too high, leading to too many machines being installed and pushing up the cost of running the network.

“[There are] 5,000 more [ATMs] than three years ago and the usage of cash by consumers is going down,” he said.

Data from industry lobby group UK Finance showed that the number of cash payments decreased by 11% between 2015 and 2016, although the Bank of England has said that in 2016 the value of notes in circulation increased by 10%. Some 2.7 million people in the UK rely almost entirely on cash.

Howells said there were protections for vulnerable customers in the proposals, which were needed to stop the system breaking apart as the card issuers - the big banks - could leave Link and join rival, cheaper systems such as those run by Visa and Mastercard.