'You can make substantial savings in the delivery of some services where there are civil servants doing routine tasks,' Pinder told delegates at the Government Leaders' Conference in Seattle.

Any savings could then be used to boost staff numbers in front line public revices, such as health care and education.

'You could take 20% out of the cost of staffing over ten years. I'm not saying we will save 20% because we may spend the money on more efficient services. That's what the private sector can achieve so we should be able to achieve the same in terms of freeing up resources,' he said.

Pinder said of the four million public sector employees, around half deliver front line personal services - such as nursing - which could not be replaced with electronic channels. But of the other half of public sector employees, up to 40% could be replaced, he said: 'if you do it right and get high levels of take-up.'

'We expect to make a long term saving but that won't be for quite a while because the savings are made from turning off other channels. We don't know what the eventual savings will be but we think that there will be an economic return. But certainly we will get better services,' he said.

The government says by using the Government Gateway infrastructure the cost of getting a service online has fallen from between £1.5m-£2m to around a fifth of that.