AT this time of year, the phone rings two or three times each evening at Gordon and Fairlie Turnbull's bed and breakfast on the edge of the Yorkshire Dales. But over the last few weeks, people have not been ringing up to book, they have been ringing up to cancel.

Fears of spreading foot-and-mouth disease prompted the Turnbulls to shut down their B&B and holiday cottages a couple of weeks ago. Now, there are no more bookings until the end of March and the prospects for Easter are looking equally bad.

"It is normally busy at weekends now but we're just cancelling them a week at a time," says Fairlie. "We have cancelled them up until the end of March and, for people who have booked for Easter, we are warning them that we don't think it will be clear by then.

"We were getting two or three phone calls a night and things had looked quite good, but there is nobody booking for the summer now, they are all ringing to cancel."

For the Turnbulls, the risk of bringing foot-and-mouth onto their farm, at Whashton, near Richmond, as well as possibly infecting other farms, was too great, despite the crucial role tourism plays in their business.

"We didn't have to close down but we have a lot of stock on the farm," Fairlie says. "And also for our visitors, because they really come so they can walk around.

"The B&B helps us keep going. We have just extended the farm and taken on some more land, so it is pretty important for us."

According to Culture Secretary Chris Smith yesterday, the foot-and-mouth epidemic is costing the tourism industry £100m a week nationally, and it could reach £250m a week if it continues into the main holiday season.

In Yorkshire, rural tourism accounts for about £1.7bn a year, more than half the total income brought in by tourism.

Jo Pickering, of the Yorkshire Tourist Board, says that a 25 per cent drop in visitors would mean a loss in revenue of £34.1m in March alone. But, the board's own reports suggest that visitor numbers are down by about 50-60 per cent. A 50 per cent fall would mean a loss of £62.8m to the rural economy.

"If this crisis does continue as it is expected, then the potential impact is very serious," she says.

"For the first half of the year, many businesses are going to be severely affected, some of which may not pull through. For many of them, Easter is the kick-start to the season but that may not happen this year."

North Yorkshire County Council is putting together its own taskforce to look at the implications for the rural economy, and how they can be tackled once the outbreak eases.

"It is obviously having a great impact - people are not going anywhere they consider to be rural," says a spokesman.

"Everybody who stays in B&Bs or holiday cottages has spending power and that has gone, and a lot of businesses rely on that. And it is not just the current position, there is also the recovery time, because people make alternative arrangements and we need to try to encourage them to come back."

The Northumbrian Tourist Board, which covers Teesside, County Durham and Northumbria, estimates the industry could lose £2m a week through a 25 per cent reduction in visitors.

"We're getting an awful lot of anecdotal evidence that our rural tourism industry is suffering immediately," says director of operations and deputy chief executive Gordon Dodd.

"There are cancellations, forward bookings are diminished and a reduction in confidence for the prospects over the summer.

"If this is to persist, we would see a real fall-out within the industry, with people saying they are not going to continue."

Visitors to the Lake District, normally already packed with day-trippers and weekenders at this time of year, have found virtually empty roads and uninterrupted views.

The Cumbria Tourist Board says 350 people have been laid off in a week, with the shortage of visitors affecting restaurants, tea rooms, shops, caravan parks, taxi firms and activity centres, as well as hotels and B&Bs.

Lake District businesses are already losing £8m a week, with many predicted to go to the wall if the crisis continues until Easter.

Janet Elliott ran a pony trekking stables in Cumbria before moving the business to Cowshill in Weardale 11 years ago, where she also does B&B, at the farm run with her son, Adam Senior.

But, with the farm surrounded by foot-and-mouth outbreaks, she decided to cancel all bookings.

"We do trekking for all the B&Bs, hotels, holiday cottages and local people, as well as people up for the day on Sundays," she says.

"We're normally busy this time of year but we have no work at all. There is nobody on the roads and nobody about. We're still trying to earn a living but it is just impossible.

"It is all very depressing. The phone is not ringing, there is just nothing, no bookings, but the bills are coming in."

The ten horses at the farm have not worked now for three weeks, but they still have to be fed.

"We're in a dense farming area and we are part of the community. We stopped trekking as soon as the foot-and-mouth outbreak started," says Mrs Elliott.

"We have a riding instructor and he has hardly had any work at all and all these animals need to be fed and looked after.

"I don't think about what is going to happen, it is so frightening. We had a very successful business but we have nothing now."

She has been running a riding school now for 30 years, diversifying from farming, originally as a back-up to the family's main agriculture business. But, as farming has reeled from crisis to crisis over the last six years, so the trekking has taken on an increasingly important role.

"It is keeping the farm going. It is the backbone of the business, the trekking and the B&B," she says.

"I don't know how long we can carry on. We have pulled all the ropes in, we have stopped spending and doing anything and we just hope we can get through it.

"When the bills land on the doorstep you just look at them in desperation. I don't want to think about how much money we're losing. There is nothing coming in at all."

And, along with other farmers, Mrs Elliott is also facing the possibility that their livestock could also become infected, making an already difficult situation even worse.

"It is like waiting for the plague to come," she says. "It is grim and it is desperate but it is like that for everybody. We're all in the same boat around here."