The banking arm of UK retailer Tesco is creating 1000 jobs in Newcastle with the opening of a new customer services centre.

Recruitment for the centre - which will manage customer sales and service for Tesco Bank's home and motor insurance customers - will start early next year, with the first 500 positions set to be filled by the end of 2010.

The roles are being created as part of Tesco Bank's general insurance partnership with Fortis UK, announced this summer.

A £2 million grant was provided by regional development agency One North East to support the move.

Andrew Higginson, chairman, Tesco Bank, says: "Tesco is building a different kind of bank - one that listens to customers, offers simple and transparent products and rewards loyalty. This new customer service centre will help us provide our banking and insurance customers with the same great service they have come to expect in our stores."

The supermarket rebranded its personal finance unit to Tesco Bank last month as part of an aggressive push to take on traditional high street players.

The bank has already outlined plans to created 200 jobs at its Edinburgh headquarters this year and will be recruiting a further 800 jobs at a new customer service centre in Glasgow.

The Newcastle centre is being set up in the heartland of Northern Rock, the failed lender that shed hundreds of jobs in the region and has been taken over by the government.

Tesco has been linked with a bid for the Rock, with the government expected to split it into "good" and "bad" banks soon before selling off the "good" section.