Bank of Scotland is piloting what it calls ''an exciting initiative set to radically alter working patterns'', by encouraging as many as possible of its 16,000 employees to work from home.

The ''homeworking'' pilot has already recruited staff working on IT projects, and the bank is now keen to expand the numbers of people and the range of jobs that can be partially home-based.

Across the UK around five million people work from home, half of them teleworkers spending at least three days a week out of the office. Teleworking initiatives have spawned thousands of jobs in remoter areas, notably the highlands and islands, but Bank of Scotland becomes one of the first big corporations to recognise publicly the wider benefits now possible from homeworking.

The bank says the advent of laptops and sophisticated networking communications ''dispels the need for an office workstation, enabling the bank to set up 'virtual' offices for homeworkers replicating their normal office environment''.

Temporary, occasional, part-time and full-time homeworking options are available, and already staff in legal services, human resources and even branch banking, as well as the more obvious IT jobs, have joined the scheme.

''We have been looking at it like other organisations for some time and we decided we need to be more proactive,'' says senior human resources manager Grant Gordon. ''We have issued a circular to all our staff, asking individuals to look at what they are doing, think about what they are doing and whether it could be done in a homeworking environment. We think that maybe it is a question of stimulating people's interest.''

Fiona O'Hagan, a project manager in the bank's IT department at Sighthill in Edinburgh, had reduced her hours to three days a week, because she was not able to spend enough time with her children Scott, 9, and Laura, 5.

''I didn't want to compromise, I was looking for the right balance between family life and my career. It had been getting too much of a strain on the family working full-time and everything that goes with that. I felt it was having a detrimental effect.'' But Fiona felt she could be working full-time, with more flexibility.

''It was a long time in the discussion stage, and I officially started in January. I now do a different job, I am helping the IT department set up an IT project support office

''It is ideal, because what I find is that most of my time in the office can be spent on meetings and discussions and presentations, and what I need is the peace and quiet to do something with all

the information I have gathered, and prepare presentations and reports. I work in an open-plan office but at home I am away from interruptions.''

How is that guaranteed? ''I gave a lot of thought to that. I work here till about 2.30 then I collect the kids, and from then on it is their time - and when a boy has homework you have to give it the attention it deserves.

''I don't actually start work again until Laura's bedtime just after 8pm.''

The bank provides a desktop computer and, depending on the job and how the pilot works, e-mail and full on-line

connections are possible.

Fiona says: ''I think that just because of the peace and quiet you get at home you can be so much more productive. If anything I tend to have to watch the amount of time I am doing at home, as I will work to finish a report rather than complete a set number of hours. So the bank is giving me a great benefit - but I think I am giving it back and it is working both ways.''

The bank agrees that the home office can be more productive, not only because of fewer interruptions but because of the savings in travelling time.

Last year Moray council set up a teleworking network enabling 20 staff to work from home, as part of financial efficiencies.

Grant Gordon says: ''We have to validate what it is they are going to do at home, what are the technology implications, the health and safety issues, and the security arrangements, and what about the question of supervision. That is probably pretty easy if somebody is coming in three days a week, but not if they are going to be out all the time.''

Until now homeworking has been limited to staff such as

financial services consultants and mobile mortgage managers,

and IT staff in locations such as Portree.

Gordon says: ''We have done lots of things like introducing career breaks, job-sharing,

different types of working patterns, and it is all about trying to have a flexible workforce and enabling the individuals to match their personal requirements with their working needs.''