Talks with unions about the insurance giant Prudential's plans to transfer work to India have broken down, making industrial action increasingly likely.

The second largest UK life insurer and the Amicus union also clashed over the Pru's plans to close its final salary pension scheme to new workers.

The unions are angry about the Pru's plans to cut up to 850 jobs at a call centre in Reading and move the work out of the UK in order to save money.

Amicus urged the company to cancel its plans.

But Prudential refused to change its mind, Amicus said.

Strike fears grow

A breakthrough is desperately needed at another meeting, scheduled for next week.

Otherwise, the union will organise a ballot for industrial action.

Amicus fears the switch of work overseas could be followed by other firms in the financial services sector, especially those with call centres.

If this was to happen, the list of financial firms shifting work to countries where wages are lower could grow fast - just as the list of firms closing their generous final salary pension schemes to new employees has grown.

Prudential is proposing to replace its final salary scheme with a "defined contribution" plan under which investment risk will be borne by workers.