The drive for savings stems from Chancellor Gordon Brown's Comprehensive Spending Review, due to conclude next month. Most Whitehall departments have submitted "excessive" public spending programmes which are now being cut back.
Alistair Darling, Chief Secretary to the Treasury, has ordered high- spending ministers to economise and raise money by selling property listed in the government's National Asset Register - the new Domesday Book. The Foreign and Commonwealth Office has come in for criticism because it submitted only an outline of its immense assets and has shown no enthusiasm for selling any of them.
The FCO owns more than 1,440 properties, all but four of them abroad. Treasury ministers who visited the British embassies in Paris and Rome in Labour's first year are said to be astonished at the "opulence" of the buildings. It is being suggested that some embassies could be moved from prime sites to centrally-located but smaller premises, releasing lucrative land and buildings for sale. FCO mandarins will hotly oppose such moves, arguing that Britain's image abroad is better served by prestige offices.
The Ministry of Defence has also been told to accelerate plans to dispose of land and buildings.