Barclays Wealth, which provides financial services for the well-off, is to close its base at Eagle Court, Lynch Wood, at the end of next year, with the loss of 392 jobs.

The news is a bitter blow for Peterborough, and comes just weeks after a furniture manufacturer announced 133 redundancies, and several months after Lloyds TSB revealed its was to axe 243 jobs.

Read more: How the job losses will not stop the city from thriving

While the news has dismayed business and civic leaders, they are adamant Peterborough's economy is in good shape and the city will continue to attract new job-creating companies.

A spokeswoman for Barclays Wealth said 200 back office roles in Peterborough would be relocated to Glasgow, where the business has been growing its administration hub for some years.

A further 150 jobs will be axed as Barclays Wealth outsources its fund administration to the Bank of New York Mellon, in Essex and Liverpool.

Another 42 posts will go when a number of smaller parts of the business are also moved to other parts of the UK.

The spokeswoman said the job losses had nothing to do with the present turmoil in the financial markets and the crisis surrounding Northern Rock.

She said: "This move follows a thorough review that has been taking place over the last 12 months into Barclays Wealth's operations process.

"We are offering people the option to relocate or transfer their employment with generous support packages for those who do not wish to relocate. There will be no enforced relocations."

The changes will be phased in over 15 months, and the business will exit Eagle Court at the end of 2008.

National secretary of the Unite union Keith Brookes said: "We are shocked by the closure of the Peterborough centre.

"But we have to be realistic – there are generous redundancy terms on offer, agreed by the union and Barclays Wealth, which, hopefully, will mitigate the pain."

Peterborough City Council leader councillor John Peach said he feared the news was a "double blow" for Peterborough.

He said: "No one likes to see jobs go from the city, and these are value-added jobs that are semi-professional, paying above-average wages that we want to keep.

"There are companies looking to come to Peterborough, and we have a number of development schemes, so I don't think there will be any stopping of the pace of growth in the city's economy."

Chief executive of Peterborough Chamber of Commerce John Bridge said: "It is disappointing news, but there are more companies looking to relocate to Peterborough than to leave."

North West Cambridgeshire MP Shilesh Vara, in whose constituency the centre is based, was also very concerned about the closure of a "significant local employer".

He said: "While Barclays talks of relocating staff, the reality is few people are likely to move to Glasgow or Brentwood.