(Reuters) - The government is to abolish, merge or reform 481 semi-independent state agencies to cut spending and help reduce its deficit, under a plan that will cost thousands of jobs and change the way many services are delivered.

The overhaul of what the government calls "arm's length bodies" because they are not under direct ministerial control will affect agencies with a wide variety of responsibilities ranging from competition to child protection to renewable fuels.

"It will save money, but that is not the principal objective of it, actually. The principal objective is to increase accountability," Francis Maude, the minister in charge of the reforms, told BBC radio.

The coalition had pledged in its government agreement to reduce the number and cost of arm's length bodies as part of its deficit reduction strategy.