At least 150 UK jobs face the axe under Norwich Unions plans

The move will lead to 150 compulsory redundancies at the group's UK operations in Norwich and York.

Parent firm Aviva said 760 jobs would be created at its Indian operations in Delhi, Bangalore and Pune. The other 190 would be in Sri Lanka.

The company, which already has 3,700 staff in India, said it aimed to have up to 7,000 jobs overseas by 2007.

With 40 staff already in Sri Lanka, this implies a move of approximately another 2,000 jobs offshore between now and 2007.

Norwich Union said these jobs would be moved in 2006 and 2007.

The firm will hire 760 Indian employees to look after its life, pensions and general insurance business, mainly in "back office administration", the company added.

In Sri Lanka, 190 new jobs will be created in Colombo, predominantly covering finance support.

It is thought they are among the first UK jobs to be outsourced to the country, whose economy has suffered from years of war between the government and Tamil Tiger rebels.

Job cuts

The insurer said it would do all it could to minimise compulsory redundancies in the UK by redeploying staff to alternative jobs.

Norwich Union have at last revealed their true intentions, which is to reduce the total UK workforce by 25% by 2007 David Fleming, Amicus

But 70 jobs will go at its site in Norwich, 60 in York and a further 20 will go from other Norwich Union locations.

The move comes in the wake of a huge shake-up at the group which has suffered in recent years as share prices slumped, denting demand for pensions and insurance.

Despite unveiling annual profits of �1.9bn in February, the firm said it would be cutting costs in an attempt to save �250m a year.

"We operate in very competitive markets where customers continually seek better value for money and quality of service," Norwich Union Life chief executive Gary Withers said.

"The experience of our existing offshore operations shows that the service levels in India continue to match those that we achieve in our UK operations.

"Expanding our offshore operations will give us the increased capacity we need," he added.

'Not acceptable'

But the plans immediately came under fire from trade union Amicus who claimed the move "points to a bleak future for the UK financial services industry".

"Norwich Union have at last revealed their true intentions, which is to reduce the total UK workforce by 25% by 2007," David Fleming, Amicus national officer, said.

"We will not accept compulsory redundancies as a consequence of offshoring in any company and that will be fundamental to our negotiations with Norwich Union."

Mr Fleming added: "The financial services employees across the UK will be bracing themselves as Amicus expects thousands more redundancies as companies are forced to show their offshoring hand."

Tens of thousands of jobs have been moved overseas by UK companies in recent years - including banks, telecom groups, airlines and rail enquiries - as companies battle to reduce costs.

Workers abroad usually earn less than their UK counterparts, with employees in India being paid up to 40% less.