Almost 1,000 people work at the call centre

About 1,000 jobs will go if a decision to transfer the work to India goes ahead.

Banking union Unifi said if the talks fail, it will have "no choice" but to ballot for strike action.

Bank officials say they are unhappy at the level of service in the call centre.

Bernadette Fisher, from Unifi, said: "Our priority is to achieve an agreement with them... that there would be no closures and that people in the centre would be guaranteed they wouldn't be made compulsorily redundant.

"What we would do is we would put it to our members 'do you think this is good enough and if you don't we will proceed to an industrial action ballot'."

What we had to do was listen to our customers and recognise that the quality of service was not where we wanted it to be David Hoban, Lloyds TSB

David Hoban, regional director of Lloyds TSB said the bank had received "thousands" of letters of complaint from customers about the level of service from the Newcastle call centre.

He said: "We did not make this decision without huge thought.

"We have to listen to our customers and we have had a lot of problems in Newcastle.

"The biggest single problem is that we have had more than half the staff leave every year in each of the three years we have been open.

"When you are losing that many people it is extremely difficult to give the standard that you need to.

"We didn't close Newcastle because we wanted to open in India... what we had to do was listen to our customers and recognise that the quality of service was not where we wanted it to be."

The company has said it aims to manage any reduction in jobs through natural staff turnover and redeploying staff elsewhere within the group.

The call centre is due to close by the end of next year.