Insurers may be forced to fork out the compensation bill for the next foot-and-mouth outbreak, the UK's biggest agricultural broker has said.

Lycetts managing director Edward Nicholl said it appeared that the government was looking at ways to pass the major compensation costs to insurers in the event of any future foot-and-mouth outbreak.

In a recent statement, Agriculture Minister Nick Brown said the government planned to work closely with the industry to develop insurance options against both animal disease and its economic consequences.

Nicholl said: “To me, this looks remarkably like the government looking to pass on losses, should such a situation ever arise again.”

Lycetts has already received around £1m worth of foot and mouth claims from northern farmers.

Nicholl said he expected this to continue to rise but the company would still renew existing foot-and-mouth policies.