Talks between management and unions representing staff at Norwich Union on a proposed redundancy deal have been suspended.

A spokesman for the Manufacturing Science Finance (MSF) union said yesterday that discussions with the company had reached a "crossroads" with both sides now considering how to progress the redundancy issue.

Norwich Union, which employs 500 people, is seeking up to 37 redundancies as part of a drive to cut overheads by 20 per cent. MSF is preparing to meet with staff at the company next week to discuss developments.

According to union sources, the required 37 voluntary redundancies have already been achieved. However, difficulties have arisen where those opting for the package are not in the right location for the company.

MSF is now concerned that the company will look for compulsory redundancies in areas, such as within its branch network, which it wants to downsize.

The union has said it is not prepared to co-operate with the company on any moves to impose compulsory redundancies.

Norwich Union wants to close one regional office and is considering closing at least one other.