London Development Agency to cut 200 jobs by April
More than 200 jobs are expected to be lost at the London Development Agency (LDA) by the end of March.
It is cutting two-thirds of its staff as a result of the government's Spending Review and will close in 2012.
It was one of nine regional bodies set up in England by the last government to try to develop local businesses.
"We are consulting staff and trade unions to explore how we can achieve staff reductions and meet our commitments," said a spokesman.
The LDA - the mayor's business arm - currently has 320 employees, which will fall to 108 by 31 March 2011.
Its budget for 2011-12 has been set at £56m, excluding funding for projects for the London Olympics in 2012.
"The government has now indicated that our final settlement will only cover legal commitments in our budgets," said an LDA spokesman.
"Despite this low settlement, we intend to continue to meet our project commitments and move towards an orderly wind-down."
The LDA was created to champion projects run by London's mayor, councils, businesses and charities.
The coalition's first Budget in June ruled the LDA and the other eight such regional agencies would be scrapped and replaced by Local Enterprise Partnerships.
Ex-mayor Ken Livingstone said he was "appalled" the government had "singled out London as the first region in the country to suffer immediate cuts to its regional development agency".
"Today's announcement proves mayor Boris Johnson has well and truly failed to stand up for London."
And Len Duvall, the leader of Labour's group on the London Assembly, said news of so many job cuts came "as a huge disappointment and shock".
The coalition was "treating London's economy like a trip to a casino, placing all its bets on the financial sector" to regenerate it, he added.
A spokesman for Mr Johnson said his aim was to ensure "the key mayoral priorities currently carried out by the LDA can continue after its reorganisation".