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Last week parent company CitiGroup announced it was to stop all new lending through Future Mortgages, and its unsecured lending brand CitiFinancial, as part of a global business realignment.

Bert Pijls, business manager for Citi's UK consumer business, said: "Following a strategic review of the consumer business in the UK, Future Mortgages and CitiFinancial were not identified as areas for strategic growth.

"By proposing to focus resource on our Citi and Egg brands we are reflecting Citi's global strategy and creating a platform for expansion in the UK personal finance market."

The bank has proposed to close its office based in Doxford, Sunderland, as well as CitiFinancial's loan centres.

The lender said it had entered into a consultation period with staff about the implications of these proposals.

Adrian Russell, media relations manager for Citi UK, said it was a permanent move and not a temporary withdrawal from the market.

Mr Russell said he was unable to confirm how many staff were likely to be affected but suggested it could be more than 400 employees.

He said: "Because it is a consultation period it would be unreasonable to say how many people are impacted. In our Doxford office we employ about 400 people."

Future Mortgages Limited was founded in 1996 by Mike Culhane, now chairman of Oakwood Global Finance, who also oversaw the launch of Edeus in 2007.

Future Mortgages was sold to Citigroup in 2001 for a reported £45m.

Citigroup has experienced severe losses as a result of exposure to the US sub-prime mortgage market. In the third-quarter of 2007 the US bank announced a fall in profits of 57 per cent, leading to the resignation of Charles Prince, chief executive of CitiGroup, in November.

At the time, Mr Prince said: "It is my judgment that given the size of the recent losses in our mortgage-backed securities business, the only honourable course for me to take as chief executive officer is to step down."

The group reported a further net loss of £2.56bn in the first quarter of 2008 and announced it was to cut 9000 jobs as a result of sub-prime related write-downs and credit costs.

Simon Webster, managing director of Kent-based IFA Facts & Figures Financial Planners Limited, said he did not expect other US investment banks to permanently withdraw from the UK mortgage market.

He said: "These things have an interesting habit of going around and I have been active long enough to see people pull out of markets and then come back in after definitive statements on more than one occasion and I am sure I will see it again."