HOPES of softening the blow from Abbey National Asset Management's expected withdrawal from Glasgow were raised last night when a consortium set up to bring financial firms to the city said two companies already there were considering expansion.

The International Financial Services District said detailed discussions were taking place with the two unnamed companies, and their plans could lead to ''several hundred'' new jobs and the uptake of more business space.

Pressure to land a ''big fish'' to take up one of the prestigious buildings rising in the waterfront area of the city have been fuelled by The Herald's reports that ANAM was preparing to axe its managed funds division, putting 173 jobs - a third of them blue chip fund management and back-up-posts - in jeopardy.

Worried business experts said yesterday that ANAM's departure would pull the project in the wrong direction. The timing of the project, at a time when the financial services sector is in the throes of rationalisation, was also being called into question.

The SNP warned that without its own tax-setting regime Scotland would remain at a disadvantage against the south-east of England and tax-break centres like Dublin.

Although property experts refuse to write off the IFSD, the Abbey departure has raised anxieties that the huge investment in new office property in the district - including (pounds) 200m falling available from now to the end of next year - will turn out to be a white elephant.

ANAM's departure, taking its (pounds) 28bn worth of fund business with it, will propel Britannic Asset Management, handling just over half that much, to the top of the league as Glasgow's biggest player.

Francis Ghiloni, sales and managing director, said: ''It would be disappointing if the Abbey funds left, but it would not be the end of the world. These things are a bit cyclical.''

Jim Mather, SNP enterprise and economy spokesman, said: ''Setting up the IFSD is the right thing to do but Scottish Enterprise and Enterprise Glasgow are up against it. If you look at Dublin, they have 12% corporation tax and no capital gains tax.

''We have to wake up and join the real world. You get the behaviour from the finance industry that you encourage. If it makes sense for someone like ANAM to move out, they will do it.'' The IFSD was not in a position to discuss Abbey National's position but a spokesman pointed to the project's 10-year timescale and the progress that had been made over the past two years - in particular the commitment to nearly 2000 new jobs in the district and the attraction of more than (pounds) 600m in investment.

''All of this is transforming the area, creating an attractive, purpose-built environment for financial and related businesses.

''Over and above this, inquiry levels for space within the IFSD have picked up markedly compared to this time last year, which we believe is a sign of more confidence around generally.''

Six weeks ago, a group led by Charles Gordon, leader of Glasgow City Council, travelled to London to make a pitch to potential City clients.

But losing a major player like ANAM makes it harder to achieve the IFSD's target of 20,000 jobs in five years - from launch in 2001 - from an investment of (pounds) 300m.

Progress to date has been slow, thanks partly to the blight that has hung over the financial sector.

A map published by the private-public sector consortium has an impressive list of occupants apparently sprouting around the area roughly bound by the Broomielaw, Kingston Bridge, Central station and the existing business quarter up Blythswoodhill in the city centre.

Closer inspection, however, reveals that most of these companies are there already.