In its 2010/11 Business Plan, the regulator said staff costs will total £346.9m in the 12 months ending March 2011, which is 16% more than 2009/10.

The 460 extra roles will be hired to deal with the implementation of Solvency II rules and to deliver the supervision required for very large firms.

Hector Sants, chief executive of the FSA, said: “If society wants a more proactive approach, it must accept that it will have a larger and more expensive regulator. Intensive supervision is inherently more confrontational.”

Last month, the regulator announced a restructure to its fees and levy calculations for 2010/2011, which will now be on the size of the regulated business.

Mortgage brokers will see their minimum fees payable to the regulator increase by 34% from £745 to £1000. The FSA said the increase was a key part in delivering a transparent regulatory regime under the Mortgage Market Review.

Simon Webster, managing director of Facts & Figures, said a change of regulatory approach rather than extra staff was needed, as the FSA had failed to effectively police the mortgage market.