Thousands of jobs could be created with the development of new office space.

Brighton and Hove City Council hopes to attract multi-million-pound investment across two sites in the Kemp Town area of Brighton.

The news is a huge boost for the city's financial sector, which has been hit hard by companies such as American Express and Lloyds TSB planning to move hundreds of jobs to countries including India and the USA.

It comes on the heels of another economic boost - Brighton has been named the third most sought-after place in the UK outside London to set up shop.

According to retail specialist Focus Property Intelligence, last year retailers demanded an extra 77,525 sq ft of selling space compared with 2003, when Brighton was the sixth most popular retail location.

The proposed new office sites would be land to the rear of American Express's headquarters in Edward Street and in the old wholesale market in nearby Circus Street.

The campus-style development in Edward Street would provide office accommodation for 1,200 plus cafes, restaurants and flats.

Many of the spaces are expected to be taken by American Express, Brighton's largest private sector employer which already has 3,000 workers at its Kemp Town site and has expressed an interest in expanding its operations there.

The other scheme would transform Circus Street's market into a library and teaching facilities for Brighton University as well as homes and office space for 800.

More than 200 town houses and flats would be built on the two sites, of which 40 per cent would be affordable homes aimed at local people on the housing waiting list.

Councillors are being asked to give their consent to the proposals at a meeting of the policy and resources committee next Wednesday. If they are approved, the council would begin the process of inviting bids from interested developers.

The Edward Street development would require £150 million of investment and Circus Street about £30 million.

The council said it would demand eco-friendly landmark buildings of a standard set by Brighton's new Jubilee library.

To minimise traffic, both schemes would be linked to the city's proposed rapid transport system and park and ride services.

It is hoped the Circus Street scheme would be occupied by the end of 2007 and the Edward Street development by mid-2008.

Deputy council leader Sue John said: "Both Edward Street and Circus Street provide a fantastic opportunity to create new public spaces and sustainable, landmark buildings such as we have at the new library."

Sir David Watson, Vice-Chancellor of Brighton University, said: "The university and its predecessor institutions have been at the heart of our city since the middle of the 19th century. More recently the university has played a major part in the revitalisation of the city's arts sector.

"Developments at Circus Street will build on this rich legacy and further identify the university with the city's prosperity and quality of life."

Des Turner, Labour MP for Brighton Kemp Town, said: "I would be happy to see more jobs coming into Brighton. I'm disappointed we don't have more manufacturing but the future seems to be white collar office work and we need to make the most of what we have."

Clifford Conway, president of Brighton and Hove Chamber of Commerce, said: "Various economic forces have taken Brighton away from being a parochial kiss-me-quick seaside town and towards being a centre for business. The city is now moving into serious business territory."

Mark Froud, chief executive of Sussex Enterprise said: "Any project that brings new businesses and employment opportunities is good news.

"However, we need a first class transport infrastructure and local people with the right skills if business expansion is to be successful."