Powergen, which outsourced its call centre operations to India five years ago, is closing its offshore facility following complaints from customers and says all calls will now be answered in the UK.

The firm plans to expand its centres in Bedford, Bolton, Leicester, Nottingham and Rayleigh in Essex and aims to hire 980 new staff by the end of the year. Around 450 of these roles are directly related to removal of operations from India.

Commenting on the move, Nick Horler, managing director of Powergen, says: "Although the cost of overseas outsourcing can be low, we're simply not prepared to achieve savings at the risk or expense of customer satisfaction."

Powergen says it will also be returning other activity – outbound calling and back office work - to the UK over the next six months.

The move has been welcomed by financial services union Amicus, which says the decision is "a welcome vote of confidence for UK call centre operations".

Amicus' national secretary, David Fleming, says he hopes that Powergen's decision will help turn the tide of companies moving their call centre operations to low wage economies.

"We hope that companies that have offshored will follow by announcing moves back to the UK and other companies contemplating moving their operations abroad will balance the potential impact on their services and brand," says Fleming.

The union has said that there is evidence of a growing crisis in the Indian call centre and back office industry, including rising labour costs and problems in recruiting experienced middle managers.

UK building society Nationwide - which has vowed to keep its call centres in the Britain - has also welcomed Powergen's decision.

Nationwide says research shows growing antipathy to overseas call centres among customers. A November 2005 poll by the bank reported 91% of UK adults saying it is important that their calls are handled from call centres based in the UK – up from 88% in 2004.

Around 84% would be less likely to choose to deal with a company if they knew it used call centres abroad – up from 76% in 2004, and 78% of people says they would be more concerned about the security of their personal data when dealing with an overseas, rather than a UK based, call centre – up from 67% in 2004.

Stuart Bernau, executive director, Nationwide, says: "Increasing numbers of companies are finding that overseas call centres are not the answer. While outsourcing overseas may save costs in the short term, by being based in the UK Nationwide experiences less employee turnover than call centres overseas and we believe our employees are more productive as well."