The Scottish turf war between giant US insurance brokers is to be stepped up by global corporate insurance giant Lockton with a major expansion of its existing Scottish operation.

Gordon Duncan, former managing director of Marsh in Scotland, ended six months on gardening leave yesterday to head up a team of "hand-picked experienced Scottish players" at a strengthened Lockton, part of the world's biggest privately-owned brokerage based in Kansas City, Missouri. Two are already announced, Gordon McLagan the former client director at Marsh in Edinburgh and Nichola Martin from Griffiths and Armour. A new office will be opened in the Glasgow area. Mr Duncan said: "The Scottish economy is performing very strongly. We believe there is significant untapped demand for high-quality covers across a range of industries."

It follows the trend of consolidation which saw New York-based Arthur J Gallagher acquire Glasgow-based Giles Group for £233m last October. In January Marsh, part of New York's Marsh & McLennan, snapped up Scotland's biggest independent, Central Insurance, for £10m.

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Lockton will build on its existing professional and financial risks operation headed by Lorraine Boyle in Edinburgh and provide a full service offering to businesses across the country.

Mr Duncan said: "We are looking to invest in further key individuals. The opportunity is vast." He said Lockton would look to grow organically but "if the appropriate operation presents itself we will look at it".