The government has claimed that rumours of Britain's call centres industry going into decline are a `myth', revealed a report.

Visiting a call centre in Bristol, trade and industry secretary Patricia Hewitt said the sector was prospering despite the number of companies outsourcing call centre work to India.

Unveiling plans for a study into the challenges facing the sector, Hewitt said: "While any job loss is tough for the individual and communities affected, we must challenge the myth that our call centre sector is in terminal decline.

"The headlines announce thousands of jobs going to India and the Far East, but the truth is that call centres in this country are still a thriving industry."

But according to the report, David Frost, director general of the British Chambers of Commerce said: "Recent announcements by the likes of HSBC and Norwich Union would suggest otherwise."

He said a simplification of tax and a reduction in red tape would create an environment where companies did not feel the need to move to less regulated countries.

GMB general secretary Kevin Curran also disagreed with Hewitt. "The impact of offshoring is not a `myth'. Just ask the thousands who have already lost their jobs," concluded the report.