Defra is concerned about the cost of valuation
Concerns have been raised that livestock valuers and farmers have colluded to increase the value of animals culled during the crisis.
The Independent newspaper says Chancellor Gordon Brown and Secretary of State for Rural Affairs Margaret Beckett are alarmed at evidence that a lack of financial scrutiny is costing the taxpayer millions of pounds.
A Defra spokesman said: "We are concerned about the cost of valuation in that the initial system was designed to speed up the valuation process.
"We need to ensure that it represents good value for money and cost effectiveness and expertise."
Changes
There have been 1,887 cases of foot-and-mouth resulting in the slaughter of 3,593,000 animals.
According to Defra, the estimated compensation costs are £925m, of which £871m has been paid to farmers.
"This is intended to help speed up the process of valuation, while retaining the possibility of individual valuation if a farmer wishes."
The Independent says valuers are paid 1% commission for every valuation they carry out on the government's behalf, with a minimum fee for a day's work of £500 and a maximum of £1,500.
The valuation bill so far has reached £4.7m, with "a couple of million" still owing, according to Defra.
Minimum prices
Agriculture and Treasury ministers are now said to be examining the possibility of appointing their own valuers to prevent abuse.
The Independent also claims official prices set by government are being used as "minimum" prices by valuers, with many farmers nominating valuers who will put a higher price on their livestock.
Some farmers compensated in February received about £700 for a breeding cow.
Similar animals will now fetching up to £1,400, says the paper.
Earlier this week it was revealed that Prime Minister Tony Blair has suspended the clean-up of affected farms amid concern over escalating costs.