An official UK government report has warned that the number of foot and mouth cases is likely to increase nearly 10-fold, to 4,000 cases by June.

"The number of cases will rise steeply with rapid expansion in the existing areas in spite of current controls," said a ministry of agriculture briefing statement.

The report said that estimates of new cases could total over 70 a day over the next two weeks. It called for "further drastic action" otherwise foot-and-mouth "will become established in Britain". Experts from Imperial College London and Edinburgh called for speedier slaughter of diseased animals combined with the immediate cull of animals around infected farms.

Forty-two new cases were confirmed on Friday, bringing the total of foot and mouth cases to 480.

The UK government announced a £150m scheme to compensate farmers who lose healthy animals as a result of foot-and-mouth yesterday. Agriculture minister, Nick Brown said generous tariffs would now be introduced to compensate farmers. Farmers are to be paid 90% of market value for their animals.

The Irish government on Friday started a strategic cull of 3,000 sheep and 1,000 cattle around its only known case in County Louth, while Germany has also reported a suspect case of foot and mouth.

EU leaders meeting in Stockholm today did discuss the foot and mouth crisis in Europe but has so far made no comment on a European wide vaccination scheme or compensation for farmers. European Commission President Romano Prodi said yesterday that the EC could offer little help to farmers as the bloc's €40bn (£25bn) annual farm budget was already under strain from "mad cow" disease.

Meanwhile, David Byrne, the EU's food safety commissioner said every farm animal in Europe should be tagged so infection routes could be quickly identified to stop the illicit movement of livestock.