The decision comes amid growing concerns from senior Government ministers that the deal would

The decision comes amid growing concerns from senior Government ministers that the deal would lead to substantial job losses amongst skilled scientists, causing long term damage to the British economy. By not closing the research and development complexes the drugs giants hope to placate the Government's fears and ease the path for the pounds 100bn- plus merger.The deal would have to be sanctioned by EU competition authorities. The UK authorities are likely to launch their own in-depth investigation and could lobby Brussels for specific undertakings on research and development jobs and expenditure.The decision on the R&D centres will safeguard thousands of jobs. Glaxo employs 1,700 people at its main research facility at Stevenage in Hertfordshire, which was opened at a cost of pounds 700m in 1995. SmithKline employs 2,000 people at its new pounds 250m site in Harlow, Essex. There had been fears that one of the companies' flagship R&D sites would be shut to cut costs.Instead Glaxo and SmithKline are planning to eliminate any duplication in the R&D already conducted at the two sites.

They will then use the spare capacity to create a new drugs pipeline and concentrate on new development areas.However, there could be job losses at some of the smaller R&D facilities the two groups run around the country as Glaxo-SmithKline seeks to rationalise and cut costs. Together, the merged group would employ more than 6,500 R&D people. Thousands of UK manufacturing and administration jobs are also likely to go.The decision was welcomed by MSF, the white collar science union. Paul Talbot, national secretary for the pharmaceutical industry, said: "This is good news for the employees. There were real fears that the Stevenage site would be closed.

But that doesn't mean to say there will not be extensive rationalisation elsewhere. We need more information, which the companies are refusing to give."There was an uproar when Glaxo closed down Wellcome's research facility at Beckenham with the loss of 1,000 jobs, after winning a hostile takeover bid three years ago.Glaxo and SmithKline are also preparing to give up some of their best selling drugs to get the merger past the competition authorities.. Financial regulators yesterday completed the first stage of an inquiry into the sale of hundreds of millions of pounds of investment products which may have been mis-sold. The Personal Investment Authority said it had collected responses from almost all providers of the income draw-down plans, which offer pension savers the chance to draw money from their fund without buying an annuity. Industry sources expect the inquiry to reveal strong evidence that financial advisers had a massive incentive to sell income draw-down products, which depend for their result on the stock market, rather than an annuity, the safer alternative.Data from individual life offices disclosed to the regulator shows that advisers could receive up to pounds 5,600 in commission for persuading an investor to put pounds 100,000 in a draw-down product. If the investor had bought an annuity, the commission on pounds 100,000 would have been less than pounds 200.Joe Palmer, the PIA's chairman, said earlier this year that commission on draw-down products "may give rise to biased advice which we will be investigating further in 1998.

The commission on pension income draw-down is considerably higher than that available on annuities."Data disclosed to the regulator shows that advice on buying an income draw-down policy from a Norwich Union representative costs pounds 10,360 - most of which will come from the investor's savings. Advice on buying an annuity through the same channel is just pounds 259.Life insurers who provide income draw-down products have become increasingly frustrated that little has been done to protect consumers from over-zealous selling by commission-hungry sales people. The product is thought to be the most complicated investment product ever introduced. With its popularity boosted by rock-bottom annuity rates of less than 7 per cent, more than pounds 800m a year has flowed into the product.John Moret, who lobbied for the products to be introduced as head of marketing at Winterthur Life, said: "I've become increasingly disappointed at what's happening in draw-down since it was introduced." He added that attempts to persuade regulators to ensure that the advisers selling it were specially qualified had been rebuffed..

On 1 March another slice of decision-making power will be taken away from the European Union's individual member states and handed over to Brussels. From that date, the EC will assume the authority for vetting all mergers involving companies with a combined turnover of more than 2.5bn ecus (pounds 1.6bn) The previous threshold was 5bn ecus. Ordinarily, such a flow of power away from national authorities into the labyrinthe of the Berlaymont building would be a cause for concern. For one thing, it runs directly counter to the principle of subsidiarity - the idea that decision making is best devolved to member states wherever possible. On this occasion, however, there will be dancing in the streets of the City, even among its not inconsiderable corps of Europhobes. The reason is that decisions on a great many more mergers will be taken out of the UK political arena and judged solely on their impact on competition within the single European market.Margaret Beckett, the President of the Board of Trade, has pledged publicly that competition will continue to be the overriding consideration driving mergers policy. But it is not for nothing that she is now known as Mrs Blockit. The suspicion is that a great many other factors are privately taken into account - such as jobs, regional policy and the origins of the bidder.