FARMERS who have not received their full single farm payment by next Friday will be paid interest.

David Miliband, secretary of state at the Department for Environment, Food and Rural Affairs (Defra), announced the decision yesterday.

He told the House of Commons that he was also willing to consider a part-payment system for this year's payment scheme.

As of Tuesday, £1.376bn -91 per cent of the total fund -had been paid to 101,356 claimants.

Altogether, 82,571 claims had been paid in full and 18,785 in part, while 2,300 claimants had received nothing.

There had been some progress, but the situation was far from satisfactory, said Mr Miliband, who said he deeply regretted the distress caused to those who had not received anything.

He said: "I know that this year's problems have caused real distress and I repeat the apology to farmers I have made before."

The EU extended the deadline for payments under last year's single payments system to next Friday.

Mr Miliband said interest would be paid on outstanding sums at one per cent over the base rate from next Saturday if the delay was the fault of the Rural Payments Agency.

Peter Kendall, president of the National Farmers' Union, described Mr Miliband's decision as helpful.

He said the announcement was welcome in that it went some way towards recognising the costs of late payments.

However, he said interest at one per cent over base bore no relation to the true cost of delayed payments to the farming industry.

Chris Huhne, Lib Dem Shadow Defra Secretary, said the Government had no choice but to pay interest because of threatened legal action, but said the package was still a miserly offering that failed to address the cost and suffering caused.