Bus and train operator Go Ahead Group is to move its headquarters from Newcastle to London.

"We have decided to set up a small HQ in central London during the first half of 2008," chief executive Keith Ludeman told staff in an internal memo. "This reflects the high concentration of Go AheadÕs business in London and southern England and the number of key stakeholders who are based in the capital city."

The group's current headquarters on Newcastle's Grey Street will not close, although Ludeman said the office would be renamed as the Group Accounting and Pensions Centre to avoid any confusion with the London HQ.

The London office will house less than 10 people, including Ludeman, finance director Nick Swift and Tom Smith, chief executive of Go Ahead's rail business. The exact location of the London HQ has not been revealed, but Transit understands that it will be on Victoria Street, close to the Department for Transport and Transport for London.

Go Ahead has been based in the North East since its creation in 1987, when the National Bus Company's Northern subsidiary was bought by its management. However, there has been speculation that the group would move to the capital since 2006, when Ludeman took over from Chris Moyes as group chief executive. Ludeman, who lives near Guildford in Surrey, did not relocate to the North East. He used an office in Go Ahead House in East Croydon, the headquarters of the group's Southern subsidiary.

While Go Ahead's roots are in the North East, its operations are mostly in the South of England. It is the largest operator of rail commuter services into London and runs buses across the region.