postgres domain service account won't start the postgres service

I hope you can help me.
On a Windows XP computer I had been running software along with Postgres
database version 8.3.12.1  and during the install I was able to specify that domain account credentials that were able to start the postgres service.   In our work environment  group policy does not permit local accounts to log on as a service.
 
I have to install a newer version of the software and postgres database and onto a Windows 7 32bit computer.  The software supplier has recommended postgres version 8.4 but  during the postgres install I cannot specify that I want to use the domain postgres service account.  I can only choose a password for a local postgres account.After the postgres install if I then change the service logon credentials to the domain account credentials then the service won't start.  If I install postgres 8.3.12.1 again the domain account can start the postgres service OK.
 
What can I do to make the domain service account work with postgres version 8.4 and above?
Thank you

George