The move is expected to reduce costs by £40m as the company struggles with the effects of the economic downturn.

Jobs are at risk throughout its operations in Scotland, but the Diageo site in Leven will see another 400 new jobs created at the Fife facilitiy.

The news of 400 new Diageo jobs has been greeted with delight by Glenrothes MP Lindsay Roy: "This is a real lift for the people of Levenmouth. I said right through the by-election last year that jobs were the key to improving lives in our community. These new jobs will have a huge impact on the local area.

"The management and workforce at Leven have worked in an exemplary partnership to tackle the challenges set by the global downturn. The investment of £86million in this area is just what we need. I congratulate all those concerned in securing the new jobs and investment.

"All politicians must now focus on securing the transport infrastructure that we need in order to build on this great news. The Leven rail link and improvements to the A92 are critical if we are to attract further investment into the area.

"Of course we regret the loss of jobs elsewhere and I know that Diageo will make great efforts to assist those affected."

Tricia Marwick MSP for Central Fife said: "I am disappointed at the loss of 900 jobs throughout Scotland due to Diageo's restructuring plans.

"However, I am delighted at Diageo's plans to create 400 new jobs in Leven and to consolidate their Cameronbridge site. This assures the future of Diageo in my constituency for a considerable period of time and I know the workforce will be as pleased as I am that their hard work has been rewarded."

Commenting of the announcement of 900 job losses at Diageo workplaces in Scotland, Grahame Smith, STUC General Secretary said: "The scale of these job losses comes as a genuine shock to the Diageo workforce. The announcement is a massive blow to the individuals concerned and their families and the impact on the Kilmarnock area is potentially devastating.

"Given that Diageo has publicly promoted its partnership model of industrial relations, management must now treat its loyal and productive workforce with the respect they deserve by urgently providing union officials with the full business plan used to justify these swingeing redundancies at hitherto profitable workplaces.

"The Scottish Government must pursue an urgent dialogue with the company to question the justification for these job losses and ensure that the company meets its full responsibilities to its workforce.