FARMERS last night insisted that they had not cashed in on the foot-and-mouth epidemic despite massive compensation claims.

The Department of Environment, Food and Rural Affairs (Defra) confirmed yesterday that 37 farmers stand to pocket more than £1m for livestock slaughtered in the foot-and-mouth cull.

Many more have asked for upwards of £500,000.

But Defra would not confirm reports that one farmer had already received £4.2m.

Last night, it was announced that the National Audit Office and the Parliamentary Public Accounts Committee would both be investigating the large claims.

The two watchdogs will investigate the Government's handling of the foot-and-mouth outbreak, and opposition MPs have already called for a public inquiry into the cost of the culling policy.

A Defra spokeswoman said the highest compensation payouts would be for farmers who lost pedigree cattle.

The Government has been accused of squandering billions of pounds in its attempt to stamp out the disease but farmers claim their compensation bids are not excessive.

David Maughen, chairman of Durham and Northumberland National Farmers' Union livestock committee, said: "Some people have fairly large farms and pedigree stock.

"Farming involves a lot of stock and it needs an awful lot of money. Any farmer who owns 300 to 400 cows, if some are pedigree, could easily lose that much money. Single cattle can cost £1,000.

"They would all rather have the stock than the money."

Defra is currently considering the £1m-plus claims, and once the valuation of the slaughtered animals has been agreed, the department has said it will pay out.

Bobby and Ronnie Waugh - the farmers accused of starting the epidemic at a farm in Heddon-on-the-Wall, Northumberland - have received £50,000 compensation.

Michael Wallbank from Skipton, North Yorkshire, has already received £700,000 in compensation but believes it is a "fair" amount to replace his 449 cattle and recoup the money he has spent over the years on his herd.

"It is, in relation to what we owned, probably fair compensation," he said.

"In relation to the size of the business, I don't think these figures are as out of line as some would expect."

Other farmers have blamed the Government for the high compensation cost, believing that if it had stamped out the disease faster they would not have lost their stock.

Mina Thompson, 72, farms in Melmerby, Cumbria, with her husband, Johnny. She denied reports that she had been paid £2m compensation but said all the money the farm received would be used to rebuild their business.

She said: "The handout may not have been needed had the Government acted quicker."

Farmer Les Armstrong, from Kirkoswalk in Cumbria, said: "It is no good throwing criticism at the farmers who have lost their livelihoods.

"Farmers are being made to look greedy but it is compensation they are entitled to by agreed European rules."

The payments row comes as the European Union is reportedly threatening to withhold millions of pounds from the UK over allegations of fraud by farmers.

Up to 60 per cent of the massive foot-and-mouth bill is likely to be paid by the EU.

Read more about the foot-and-mouth crisis here.