Bradford & Bingley is to move its head office to London - breaking a pledge it made only two years ago to stay true to its 150-year-old roots after its conversion to a bank.

The firm, which has been linked with Barclays in merger rumours, has signed a lease on a 15,000 sq ft office in Bloomsbury for its new headquarters.

Its former headquarters at Crossflatts, Bingley, will be re-branded as the Crossflatts Service Centre.

Bradford & Bingley, which is Yorkshire's biggest financial institution, became a bank in 2000 after its 2.7 million members voted to end its history as a building society.

But at its annual meeting in April 2000, shortly before the historic vote, then chairman Lindsay Mackinlay promised it would keep its headquarters in Crossflatts.

Today Pauline Wood, president of the Bingley Chamber of Commerce, said the move was a blow for the town.

She said: "It's very sad that the name is going as it's always been synonymous with the Bingley.

"But the good news is that the staff at Crossflatts will be staying and they obviously contribute a lot to the local economy.

"It was inevitable really that when it became a plc that this would happen, it's just the thin end of the wedge."

Bradford Council leader, Councillor Margaret Eaton, said the company would lose its personal touch by moving to the City.

She added: "Since it became a bank it has become less and less local and that's a great shame indeed.

"People will feel aggrieved that this decision has been made behind closed doors and it's a great disappointment.

"It's a household name which has been an integral part of our community but now for some reason the bosses seem to think it makes sense to up sticks, yet with today's technology we all know it isn't necessary to be based in the congested city of London."

Rosemary Thorne, the Bradford & Bingley's finance director, attempted to downplay the decision to transfer its headquarters.

"We need an office in the capital. But all our registered offices are in Yorkshire and in fact we are moving some more up here," she said.

The firm is believed to want to switch its HQ to the capital so it is nearer city analysts and stakeholders.

A spokesman for the firm added: "We are still very committed to Yorkshire, that is our heartland.

"We are investing quite a lot in the community."

But a spokesman for the Yorkshire and Humber Chambers of Commerce said: "It is very disappointing that a company which has its roots firmly in Yorkshire is to up sticks and leave for London.

"We still firmly believe that Yorkshire and Humber is the best region in the country to grow and develop a business."

Better Bingley Campaign chairman Keith Yardley said he felt the move had been on the cards for a number of years.

"Gradually more and more of the top people have been moving down to London and this was bound to happen," he said.

"Obviously it makes sense that they are in the City to get a feel for what's happening and it will also add to their kudos to be alongside other big banks."

Bradford & Bingley was formed in 1964 when the Bradford Equitable and Bingley Building Society merged.

It employs about 700 people at the Crossflatts office.

Last year the firm announced it was to shed 200 jobs at the site and other offices around the Bradford area in a shake-up

A further 300 jobs were lost around the country as when it embarked on a cost-cutting programme following its conversion to a bank.

Chief executive Christopher Rodrigues said at the time that the decision to cut jobs was "painful but necessary" to ensure the firm's continuing success.

Recent rumours about a deal with Barclays stumbled after the banking giant failed to acquire the former building society in a £2.5 billion takeover bid. City analysts saw it as an attractive option for Barclays as the Bradford & Bingley has a good distribution network.

Under the terms of its demutualization in 2000, Bradford & Bingley is open to agreed mergers only until 2005.

Barclays' initial attempt to acquire Bradford & Bingley failed due to turbulence on the stock market, which made accurate pricing impossible.

If share prices stabilise industry insiders say Barclays may well make a second bid.

When Barclays announced its recent interim results at the beginning of the month its chief executive Matt Barrett said it would primarily concentrate on growing its business at home organically, while looking to expand its business abroad through mergers or acquisitions.

Other rumours have linked Barclays with Spain's Banco Zaragozano SA.

Bradford & Bingley has 3.5 million customers and is Britain's fourth largest estate agent. It has more than 500 retail outlets and 900 financial advisors.

Business section