Politicians and banks are being urged to help small businesses as the north of England recovers from the foot-and-mouth crisis.

A new report says rural firms are still struggling to overcome the effects of the 2001 outbreak.

Researchers at Newcastle University say small businesses should be given lasting support - both financial and advisory - from the government and other bodies.

They say the effect of foot-and-mouth disease on businesses has been additional debt, reduced reserves, disrupted trade, and postponed growth and investment.

'Dig deeply'

Jeremy Phillipson is one of the team at the Centre for Rural Economy who produced the report, called Confronting the Rural Shutdown.

He said: "Foot-and-mouth was a crisis for the rural economy but the main emphasis and debate has been around farming and tourism.

"The message is that the impact of foot-and-mouth extended far beyond agriculture, and the issue of business recovery remains an important consideration through 2002 and beyond."

The report calls for financial support from the government and other bodies, such as regional development agencies.

It also says other public bodies and banks should remain sympathetic to the continued financial difficulties many businesses face.

Mr Phillipson said many households and families connected to small businesses had to "dig deeply" to get by - often dipping into personal finances.

Hours cut

Others coped by taking out or renegotiating new loans, cutting back on household spending, or having other household members looking for a job.

"The impact of foot-and-mouth on business can not just be seen through statistics such as unemployment figures.

"Many of these firms laid-off casual or seasonal staff, or cut working hours of their staff."

The Newcastle team surveyed 180 rural micro-businesses employing less than 10 people in the north of England.