Budget Insurance Services is to set up a 200-seat call centre in South Africa as part of its long-term expansion plan.

According to company sources, the new jobs are part of a recruitment drive, in the UK and abroad, that could see 800 new employees in three years.

Budget group chief executive Peter Winslow said: "We are committed to remaining in the UK but have some incredibly ambitious recruitment targets to meet to achieve the growth we are looking for and do not believe we will be able to fulfil them here."

The South African centre is aimed at helping the company overcome the problem of finding UK staff to work in call centres, especially at anti-social times.

While the broker will be recruiting in the UK it has not ruled out increasing its presence in South Africa to meet a target of doubling its customer base from 800,000 to 1.6 million by 2006.

Winslow said: "We are also expanding our UK operation and have already invested in a new contact centre in Sunderland as well as opening new offices in Peterborough."

The new centre will be located at Knowledge Park, Cape Town and is scheduled to open in June 2004.