A report commissioned by the government said Cardiff and Newport could be home to jobs transferred from Whitehall.

The Chancellor, Gordon Brown, commissioned Monday's report from Sir Michael Lyons of Birmingham University.

Sir Michael says the geographical pattern of government needs to be reshaped and up to 20,000 posts could be switched in a �2bn cost-saving move.

He said Whitehall departments have identified jobs that could be moved from London and the south-east of England.

The taxpayer would save up �2bn over 15 years, he said.

The Office for National Statistics suggested it could slim down its London base and develop its operations in Cardiff and Newport.

Assembly jobs

Cardiff is also mentioned by another Whitehall department.

Sir Michael said the London headquarters of civil service departments should be radically slimmed down.

But he warned that the jobs suggested for transfer are largely relatively junior operational ones.

Last month assembly Finance Minister Sue Essex announced hundreds of civil services jobs would be switched from Cardiff to the south Wales valleys, mid and north Wales.

Exact details of locations are expected to be revealed before the summer with the offices opening in 2007.