London will suffer the largest employment losses in the UK because of the credit crunch, according to analysis produced for the Local Government Association (LGA).

The LGA commissioned Public and Corporate Economic Consultants to conduct the research, which discovered that the capital could loose 370,000 jobs by the end of 2010 - just under 8% of London's current workforce.

The study concluded that there would be "very marked regional variations" in the recession, with cities outside the capital likely to fare better due to the increased amount of public sector employment and less reliance on jobs in financial institutions.

More jobs are expected to be lost in the south-east than the north-west and the survey predicted that by 2010 1.7m jobs would cease to exist in the UK.