The Foreign and Commonwealth Office (FCO) expects to save £23m by 2006 using a knowledge management system to share information between staff across the world.

The first phase of the project went live last month, covering online discussion groups and a staff directory.

Also part of the initiative are shared workspace areas and personalisation software tools, so that staff aren't bombarded with data they don't need.

The existing FCO network is a hub-and-spoke system centred on London. The new design will link all 250 global offices to create a single pool of information accessible from anywhere using a virtual private network over the internet.

The main system should be built by the end of this year, piloted until April 2003 and rolled out over the following 18 months.

FCO knowledge programme manager Alan Bubbear said: "Staff will be more productive rather than wading through 200 emails a day.

"It will also allow us to use resources more flexibly. We won't need so many people in the UK because staff overseas will report back to the minister without large London departments to process the information.

"We also hope to respond more flexibly to crises because everyone will be working from the same information."

The main challenge facing the project is the cultural change. "It will be technically possible to redeploy staff, but whether that is culturally acceptable is another matter," said Bubbear.

"The IT is an enabler, but there are a lot of working process changes we need to instigate.

"We are moving from a push culture, where we push information out, to a pull culture, where people take responsibility for what they need and go and look for it."

The project is being managed by Fujitsu Services and uses BEA software for the web interfaces.