VisitBritain may have to lose 40 per cent of its 225 London-based employees and a further 25 per cent of its overseas staff, due to a cut in their budget by the DCMS last year.

If the agency's restructure goes ahead, the number of London staff will be reduced from 225 to 135 and overseas staff levels will be reduced by a quarter to 145. It has been reported, however, that the actual headcount could be lower due to current vacancies and potential outsourcing.

The Tourism Society believes that this blow to the industry will cause losses to the economies of England, Scotland, Wales and Northern Ireland far in excess of any perceived savings.

Stephen Dowd, chief executive of UKinbound, said: "Having already shed over 120 posts within the last two years, these latest cuts will seriously undermine VisitBritain's ability to deliver its core functions; let alone the additional demand of promoting the UK during the run up to the 2012 Olympic Games.

"This announcement can only demoralise an organisation that has been restructured four times in just five years by a government that is unable, or unwilling, to appreciate the value and importance of inbound tourism to the UK economy."

Further details about the agency's restructure will be announced in October.