BT is to lose a further 4,000 workers by 2003.

The telecoms group has cut staff numbers in its retail division by 9,000 during the past two years.

The total 13,000 staff cuts are part of the group's effort to cut costs by £850m in the division during the next three years, it said.

A spokesman said there were no compulsory redundancies, and a large part of the cuts were agency staff.

The spokesman said: "This is the one of the first major updates from BT Retail. We have got an ongoing policy of reducing headcount and this is part of that.

"At the time of our results in November, we confirmed that this year, staff would be reduced by between 5,000 and 6,000 as part of an ongoing programme, and this is a large part of that.

"But this is the first time we have confirmed the numbers from BT Retail."

The shake-up came as BT said it aimed to push growth in its retail division - which provides phone and Internet services for business and residential customers - during the next four years by driving forward Internet and mobile services.

The group said the drive would "more than offset" the expected erosion in revenues from the division's core voice products, such as its fixed line phone business. It is setting itself a target of three per cent compound yearly growth for the next four years in its retail division.