UP to 60,000 civil servants - three times as many as expected - could be moved out of London to the North and other regions, it was revealed yesterday.

Sir Michael Lyons, the man picked by the Government to identify public sector jobs to be relocated, trebled the number he believed could be shifted outside the capital.

The prediction will raise hopes that many more jobs - which are seen as a powerful boost to economic growth - will be moved to the North-East and North Yorkshire.

New units of government departments will be set up in the regions, employing local workers, as old offices in London are wound down and vacancies are unfilled.

Sir Michael is due to publish his long-awaited report on Monday. Two days later, Chancellor Gordon Brown will signal the Government's view in his Budget speech.

The report will call for Deputy Prime Minister John Prescott to work closely with regional development agencies, to identify where the jobs can be relocated.

It will conclude that moving an initial 20,000 jobs will save £2bn in wages and the sale of properties over 15 years, despite start-up costs in the new locations and compensation payments.

In an interview with a national newspaper, Sir Michael said: "I believe 20,000 jobs is a good first step, but there should be the possibility to move three times that number over a 20-year period."

An analysis in January for the Government, by property consultants King Sturge, picked Middlesbrough, Stockton, Sunderland, Newcastle and North Tyneside as good locations.

Darlington Borough Council put forward proposals outlining reasons why the town would be an ideal home for a Government department and The Northern Echo backed the authority case by launching its Devolve to Darlington campaign.

But Darlington was left out of the analysis altogether, as were York and Harrogate, probably because unemployment - one of the criteria used - is much lower.