LONDON - AT least 70,000 jobs will be lost in London's financial district within barely a year as it grapples with the world financial crisis, the Lord Mayor of the City of London said on Wednesday.

Ian Luder, who promotes Britain's financial services sector abroad as part of his non-political role, added that concerns about the bonus culture had to be addressed but stressed those who take risks needed to be rewarded.

Asked about the extent of likely cuts in the city at a press briefing, Mr Luder said: 'The forecast is that 70,000 direct jobs in the sector will have gone between late last year and the early part of next year.

'Of course, it's a situation which you'll see repeated across the globe in financial services sectors.

'It's not just the direct jobs, it's obviously the jobs that indirectly depend on people in employment.'

Britain's economy shrank 0.5 per cent in the three months to September, putting it on the verge of recession which Prime Minister Gordon Brown and Bank of England governor Mervyn King have warned is likely.

Mr Luder added that the system of paying bonuses to top executives should be reformed to reward businesspeople who pursued a long-term strategy rather than short-term gains.

This could take place through a bigger role for remuneration committees and non-executive directors, he said.

'I think they have to sit down much more carefully and say 'what are we trying to achieve, where are we trying to take this institution five years from now, ten years from now?'' he said.

'That's what we want to reward, we don't want to reward the next quarter's results.'

But he added that 'risk and reward can be very good things,' stressing: 'I don't believe we should be frightened of seeing society advanced and seeing progress made and reward to those who help achieve it.'

Mr Luder, a tax partner at Grant Thornton, also called for an independent research into whether the government's increase of the top level of tax to 45 pence in the pound from 2011, announced in Monday's pre-budget report, would hit Britain's competitive position.

'We have to (protect) the public finances but do it in a way which does not have unintended collateral consequences,' he said.

He is planning to visit countries including India, the US, Russia, Canada and Malaysia during his year in the job, which he started a few weeks ago. -- AFP