A £5 MILLION recovery package to help ailing businesses survive the foot-and-mouth crisis has run dry.

The news will hit those traders across South Lakeland, Eden and Furness who had not applied for grants before the money ran out.

Already, many fear that early applicants who have received cash now have a distinct advantage, which could lead to their own trade suffering

even more.

Carlisle-based Business Link, which received £5 million from the Rural Recovery Fund to revive Cumbria's hard-hit businesses, has been lobbying for extra cash, but is uncertain whether more funds will be available.

It has helped at least 630 businesses, but more than 400 are still waiting for funds.

A Department for Environment, Food and Rural Affairs (DEFRA) spokesman said this week: "We are reviewing this situation on a daily basis and we are obviously considering the case for enlarging it (financial aid)."

He added that more than £300m was already available to hard-hit businesses, including hardship rate relief, match-funding donations for hardship charities and advertising funds.

When pressed, however, he refused to give 'a precise time-scale' of when businesses could expect more support, but assured: 'The situation is under close review'.

Guest house owner Lindsey Morgan, of Norwood House, Ambleside, had been applying for aid and was shocked and angry about the empty fund.

She said the scheme was 'very badly thought out', criticising the application process as too time-consuming for someone running a business without staff and looking after children.

" People with others working for them can afford to sit and look at paperwork, and can get the funding.

This now puts us at a worse advantage because they have all the extra money for advertising and will do even better."

She said: "If they (Business Link) don' t get extra money, there will be a hell of an outcry because others have got it and have obviously been given too much."

Jim Lloyd, of Mylnebridge Guest House, Windermere, also felt guest houses with staff had benefited from having more time to apply early, saying: "They have secured a double whammy - not only did they get the money but they will get the benefits from it."

He felt Business Link should have waited longer before allocating funds, to ensure everyone had a share.

However, Business Link adviser manager Irene Gravenor said they had always been optimistic about getting more funds by proving demand.

"We decided it would be better to get some serious money out to help businesses move forward, and lobby for more," she said.

Recovery manager Suzanne Caldwell confirmed all funds had been allocated: "We were committing funds at a rate of £400,000 a day.

That's how quickly it went."

New applications are being numbered, and any new money will be allocated accordingly.

Businesses should now only send 'expressions of interest' so an accurate bid for funds can be made to the North West Development Agency.

Mike Shields, NWDA's chief executive, said this week his organisation was seeking an extra £6m from DEFRA to meet demand, adding that work to provide short-term aid to worst affected businesses would continue.

A North West Rural Recovery Action Plan was also being prepared to help 'hard-hit rural economies rebuild in a sustainable manner to secure a long-term future,' he said.

Through the Recovery Fund, small businesses could receive free accountancy time and up to £15,000 for IT, marketing and loan interest payments.

Those who have benefited include hotels, outdoor education centres, stables, manufacturers and a veterinary practice.

Westmorland and Lonsdale MP Tim Collins said he hoped to discuss the situation with Business Link's chief executive, Brian Lightowler, and he is also seeking business rate exemption until January 2002, and - for those who did not qualify - a significant council tax rebate.

Rural recovery Tsar, Lord Christopher Haskins, told the Gazette he was not responsible for short-term recovery measures, but promised to raise the issue 'with the appropriate authorities'.