NEARLY 500 jobs are to be lost with the closure of a long-established mortgage business.

In a move that will deal a blow to the local economy, Barclays is to shut the offices of its Woolwich operation in mid-2008.

Some 490 people will be affected in the complex at the junction of Erith Road and Gravel Hill, Bexleyheath.

The bank is also ditching the Woolwich name for branches and re-branding them Barclays.

But the name, given to the former building society in a Woolwich pub in 1847, will be retained as a mortgage brand marketed by the bank.

Barclays, which bought the Woolwich in 2000, said it wanted "to minimize compulsory job losses with re-training and re-deployment the preferred options wherever possible".

Russell Powles, operations director at Bexleyheath, would not rule out compulsory redundancies.

But he hoped most people who wanted a job would be offered one elsewhere in the Barclays group, even it that meant commuting to London.

Some staff will switch to the Woolwich mortgage processing centre at Crossways Business Park, Dartford.

Mr Powles said he wanted staff to stay until the transfer of accounts from Woolwich to Barclays was completed.

"Essentially we need all of those people to do a job over the next 18 months because we’re migrating Woolwich to Barclays accounts," he said. "We have a busy couple of years ahead of us.

"At the end of that period, it is our intention to redeploy as many of those people as possible within the Barclays group."

He expected some staff to accept voluntary redundancy.

Amicus, the trade union, is being consulted on the changes, he said, and staff would be offered re-training.

The Bexleyheath site is owned by a developer and leased back to Barclays. There has been speculation that it could become a supermarket.

There are 20 Woolwich branches in Kent out of 373 nationwide. Any within 300 metres of an existing Barclays branch will shut.

Barclays UK Retail Banking chief executive, Deanna Oppenheimer, said: "Our focus will be on enhancing the Woolwich brand, improving the branch network, and streamlining back office processing."