GOVERNMENT grants to help rural business cope with the recession may be doubled for schemes like farm diversification - if the European Union agrees. At present, applicants to regional development agencies can receive 50% of the estimated costs of expanding their businesses.

That will now be increased to the full 100%, hopes Defra secretary Hilary Benn, who in recent speeches has emphasised how rural business can make a major contribution to fighting the credit crunch.

The money will come from the £3.9 million Rural Development Programme which, so far, has not been cut in the emergency drive to cut back Government spending. Permission to go ahead will be sought from the European Commission so that it can start “as soon as possible.”

Says Mr Benn:"I want to make it easier for rural businesses to benefit from rural development funding in this economic downturn.

"Many businesses are finding it hard to get credit or finance from the private sector in the current climate, so they need to be able to benefit fully from help that is available from the government."