BUSINESSES hit by the foot-and-mouth crisis could be offered interest-free loans to help them recover from the loss of trade.

The move could extend to urban shops where sales of outdoor clothing and equipment have fallen, as well as traders in rural areas.

The scheme is expected to be part of a rural recovery plan being put together by regional development agency One NorthEast, using a £2.5m Government grant.

It comes alongside renewed efforts to reopen footpaths, closed at the start of the epidemic, to try to relieve the pressure on hard-hit firms.

Miles Middleton, chairman of One NorthEast's rural regeneration group, said they were looking at loans rather than grants as the way to help affected businesses.

He said: "Loans are easier to administer, and if it is a loan on favourable terms, then people in more genuine need will come forward."

He said interest rates on the Government's own loans scheme to help stricken firms were too high for many businesses.

Peter Sloyan, chief executive of Northumbria Tourist Board, said some businesses had no income coming in for several months.

He said: "We need to give them something that enables them to survive and pay the basic bills, so when tourism comes back they will be able to pay the loan back."

A series of risk assessments will be carried out on footpaths, to determine which can safely be reopened.

Mr Sloyan said one example could be the path to High Force waterfall in Teesdale, which was away from farmland.

He said: "Unless we begin to get footpaths open, we're not going to be able to promote bed-and-breakfasts in rural areas."

The recovery plan is expected to be finalised by the end of the week.