UK farmers have been told that claims for compensation because of hardship will be paid by the European Commission.

The pledge came from the European Agriculture Commissioner, Franz Fischler, who was speaking at the annual conference of the National Farmers Union in London.

His comments came after Prime Minister Tony Blair had told farmers that simple cash subsidies were not the way to revive their struggling industry.

He said there had to be change, with farmers diversifying into non-agricultural areas and being more innovative in their marketing.

Mr Blair's speech drew only a polite response from delegates; in contrast, Dr Fischler was warmly applauded.

Farmers want the UK Government to seek the full £450m available from the Commission to make up for losses incurred as a result of the strong pound.

So far the government has applied for just £88m of the sum available to countries who can prove agriculture hardship as a result of exchange rate volatility.

EU will be obliged to pay

Dr Fischler told delegates: "If the UK applies for agrimoney, we will be obliged to pay our part of the money."

But he added: "I have however no magic wand nor an unlimited budget to offset the negative effects of major economic influences.

"I can only try to minimise their impact. Contrary to that which is often suggested in some of the British media, we in the European Commission do not live in an ivory tower removed from reality.

"We are well aware of and sensitive to the difficulties of farmers and make every effort to help where we can."

NFU leaders welcomed Dr Fischler's comments. Deputy director general Ian Gardiner said: "The commissioner has in effect rubber-stamped any claim for compensation - now we need the government to make an application for the full amount. We welcome very much Dr Fischler's assurances."