The chancellor has pledged to help civil servants who lose their jobs in the government's efficiency drive find new employment.

Giving evidence to the Treasury select committee, Gordon Brown insisted that there would be a "major opportunity" for displaced staff to retrain and move to other jobs on the frontline in public services.

"We are examining what retraining we can provide to help staff from back office functions move into frontline work within the public sector," he told MPs.

Help will also come in the form of an "efficiency challenge fund" worth £300 million, which will fund redundancy payments and early retirements over the next two years.