There will be staff reductions at the Department of Trade and Industry but science budgets are set to rise, the chancellor has told MPs.

Patricia Hewitt's ministry will see its civil service posts cut by 1,010 by 2007/08, with a further 270 posts facing the axe in other bodies such as UK Trade and Investment.

The government hopes to achieve at least £380 million in efficiency gains by 2007/08, with the cash being spent on other priorities.

In a bid to boost economic development across the country, regional development agencies will see spending rise from the current £234 million to £483 million by 2007/08.

"This settlement is good news for business, manufacturing and scientists," said Hewitt.

"It is a package to build an environment for industrial and business success and to promote productivity growth right across the UK."

Gordon Brown also promised science spending would double from its 1997 level, rising from £3.9 billion this year to £5 billion in 2008.

This will go towards extra science teaching in schools, higher salaries for researchers and more science-industry link-ups with spending rising to 2.5 per cent of national income by 2013.