More than 100 jobs will be axed at Scotland's only passport office, with the processing centre to close by the end of the year, it was confirmed yesterday.

The Identity and Passport Service (IPS) said 114 staff, more than one-quarter of its entire Scottish workforce, will go as part of a restructuring of the Glasgow regional office.

The job losses are a result of a decision by the Home Office agency to stop the processing of passport applications at the Milton Street centre due to a "falling demand" for passports. The closure will not affect the public counter service, which deals with urgent and emergency applications.

It confirms a proposal first mooted in April, although the number of job losses is larger than anticipated.

It also follows last week's three-day strike over office closures and pay, which led to the disruption of the issuing of passports and the cancellation of appointments and interviews.

Glasgow is now expected to begin specialising in tackling identity fraud.

The Public and Commercial Services (PCS) union said last night that it would fight against any compulsory redundancies, adding that the move would lead to postal delays and hold-ups in processing passports as centralised offices became bogged down in applications from across the UK.

Politicians from across the spectrum also condemned the decision, with one claiming it could be "the final nail in the coffin for the future of passport services in Scotland".

The IPS has regional offices currently processing postal and counter applications in Belfast, Durham, Liverpool, Newport and Peterborough as well as a main office in London. It has insisted this will remain the case.

The union claims that, while it fears that further offices and jobs will be cut in the future, the industrial action by staff in Glasgow has guaranteed a stay of execution and delay in the announcement of further closures until after 2011.

Mark Serwotka, PCS general secretary, said: "This news comes as a bitter blow to people who deliver a world-class service and will lead to a poorer service and an end to the processing of passport applications in Scotland.With more office closures and job cuts in the pipeline we believe resources are being diverted to implement the controversial and costly ID-card scheme."

The IPS said it would offer staff the opportunity to receive voluntary redundancy or early retirement.

Chief executive James Hall said: "It is regrettable we have had to take the difficult decision to restructure our Glasgow office, but falling demand for passports means IPS must make decisions to maintain our high standards across the business.

"Customers will still receive the same first-rate service when applying for passports and Glasgow's public counter will remain open to provide assistance."

Workers at the office were briefed yesterday afternoon. A total of 170 jobs will remain at the centre.

SNP MSP Sandra White, who campaigned for all jobs to be retained, said: "I am very disappointed and fear this is the nail in the coffin for the future of passport services in Scotland.It is a huge blow."

Acting leader of the Scottish Liberal Democrats Michael Moore said the news was a "devastating blow".

SNP MP John Mason, who called for full passport services to remain in the city during the recent Glasgow East by-election, said: "Confirmation that these redundancies are going ahead will devastate all those employed at the centre and raises serious questions about its future."