Politicians have welcomed news that Tesco Personal Finance is close to finalising a deal to set up a large insurance office in Glasgow that will create more than 800 jobs.

The company, which is evolving from Tesco's personal finance division into a fully-fledged bank, has earmarked the new Broadway One building in Cowcaddens, next to the Herald and Times Group headquarters, as the most likely destination for a key part of its expansion.

Tesco is in talks with Scottish Enterprise and property agent Ediston Properties, and a conclusion is expected in "two to three weeks", according to one source.

Although the retailer is said to have several other options in different locations outside Scotland, a Glasgow deal is said to be "90% likely".

Pauline McNeill, Labour MSP for Glasgow Kelvin, said: "It's a lot of jobs and will benefit a lot of people in my constituency. If anything can be done by the Scottish Government or the city council to nail this down, it should be done."

Robert Brown, Glasgow Liberal Democrat MSP, said: "At a time when job losses are being announced on an almost daily basis, these are very welcome reports. I hope that Tesco recognises that Glasgow is a great place to do business and makes a firm commitment to the city soon.' The retailer is understood to want to make a "big statement" at the state-of-the-art, six-storey offices, and is also considering opening a store on the ground floor.

The offices are expected to mostly house insurance call centre staff, together with senior management. There is thought to be room for 1200 to 1500 workers, which suggests staff numbers may increase in the future. It is not clear whether Tesco might move the several hundred staff it already employs in the city at its joint venture with RBS at George Square.

The latest development comes just weeks after the retailer announced it would create 1500 jobs through a new insurance partnership with Belgo-Dutch group Fortis.

Tesco Personal Finance has already created 250 new jobs in Edinburgh this year, having decided to headquarter its new 450-strong operation in the Haymarket area of the city.