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Made to Measure will cater for clients with budgets of up to £5 million.

The agency will be run by Peter Thomson, the former managing director of CDP Media, now Mediahead.

Manning Gottlieb took the decision to launch the agency after finding that some smaller clients were dissatisfied with levels of service from large agencies. It argues that a percentage of these smaller clients also found that resources and systems at smaller agencies were not of an adequate standard.

Made to Measure will operate separately from Manning Gottlieb but will be able to tap its and its sister agency OMD's resources.

Manning Gottlieb has made the move after growing to an agency of 90 clients including large spenders such as Virgin, the AA, Nissan and Sony.

Initially, Made to Measure will base itself at Manning Gottlieb's offices but within the next few months is expected to move to its own premises.

It is currently in talks with potential clients.

Nick Manning, the chief executive of Manning Gottlieb, said: "Made to Measure is specifically designed for clients that don't want to feel awkward in a big place and want a personal service. I think we're opening up a can of worms. Smaller agencies should feel threatened."

Thomson, who left Mediahead late last year, will recruit staff for the agency as it wins client business. The aim is for Made to Measure to confine itself to a limited number of clients in an attempt to maintain service levels.

The creation of Made to Measure follows a strong performance for Manning Gottlieb in 2002 that saw it grow staff and account numbers with wins including the AA, Yahoo! and the Sony division Columbia Tristar. It also forged closer links with the OMD network with the creation of an OMD Group in the UK, which enables it to share resources with OMD UK.