THE BRITISH Chancellor, Mr Kenneth Clarke, vigorously defended his government's handling of the beef crisis yesterday. He said it was an "outrage" to claim", ministers had refused to slaughter infected cattle to save money for, pre election tax cuts.

Mr Clarke stressed that the cabinet had not even discussed preelection tax cuts, and pledged that the Treasury would finance any necessary measures to protect public health and restore confidence in Britain's beef industry.

"If it is in the national interest to spend money, then we will always do so ... We are the Tory party. If you want cynicism and hypocrisy you must look at the Labour Party," he said.

But the Labour leader, Mr Tony Blair, accused the government of using the beef crisis as a propaganda weapon against his party rather than acknowledging its own shortcomings.

"Whatever the mistakes of the past and woeful handling of the situation last week, we are willing to help the government in restoring confidence to the market and we are ready to use what influence we have to ensure Europe plays its part, too," he said.

After announcing his party's rescue package for Britain's beef industry the Liberal Democrat leader, Mr Paddy Ashdown, also attacked the government's indecisiveness.

"In the BSE saga we have seen all the failures of this government and of modern Conservatism. It begins with an obsession with low cost, profit driven deregulation. It grows through a market knows best, the people know nothing philosophy.

"It is compounded by weak and indecisive leadership. It festers with the reputation for broken promises and trust betrayed," he said.

The Liberal Democrat plan to restore consumer confidence includes the selective slaughter of older cattle, a quality assurance scheme, a new food commission to represent consumers, and close co-operation between the government and Europe.

The Health Secretary, Mr Stephen Dorrell, met beef industry representatives to discuss how to restore consumer confidence.

He described the two hour meeting as "extremely constructive," but refused to disclose what had been agreed.

It emerged yesterday that a mountain of unsold British beef is building up, with over 150 tonnes in long term cold storage.

Over 400 workers have been temporarily laid off by a leading meat processor, while three livestock auction houses have closed as a result of the crisis.