Conservatives' Government waste-buster poised to damn the DTI

David James, the troubleshooter appointed by the Conservative Party to review Whitehall waste, will deliver a damning assessment of the Department of Trade and Industry this week.

The Independent on Sunday has learnt that he will recommend a "fundamental overhaul" of the department which would save it billions of pounds.

One source said: "It will be quite radical. It will say the DTI should change its role, and recommend that some of its roles should disappear altogether."

Despite job cuts announced last month, the DTI still secured a 3 per cent real-terms rise in its budget in the latest spending review. Under Government plans, its budget will reach £6.6bn by 2008 from just under £5bn this year.

Senior Tory figures want Mr James to identify savings of £60bn to £80bn across all departments. If the Tories returned to office, his recommen- dations - subject to approval by shadow Home Secretary Oliver Letwin - would be implemented.

Last month, he issued his recommendations for the Department for Environment, Food and Rural Affairs. He outlined efficiency savings of almost £500m, which included getting rid of more than 2,500 staff.

The DTI recommendations, which will also outline staff cuts, will go beyond cost-cutting measures and look at the Government's relationship with the business sector. Business leaders have attacked the department for over-regulation.

In the run-up to Chancellor Gordon Brown's spending review, Digby Jones, head of the CBI, told the Government that companies do not see the DTI as "a sacred cow". In his submission for the review, he said that most companies would be "amazed if there were not scope for major savings".

In an interview with The Independent on Sunday earlier this year, Mr James explained why he was waiving fees for the work. "I would have done it for Labour because it's a fascinating job."