Peter Watson, managing director of Business Link North West, said it had noticed a surge in enquiries as the slowdown puts the squeeze on company's cash flow.

He said that he expects the problems to last for around another year but said that manufacturers were not as hard hit by the latest downturn as they had been in past years.

It is 15 months since Business Link's five county agencies merged into a single company with its base on Bluebell Way, Fulwood, Preston.

Mr Watson said: "It is tough out there but the fundamentals of running a business, like keeping costs down and having a strong business plan, still count now as much as they ever did.

"In the past it is Lancashire which has suffered the most because of the strong manufacturing base, but this time they seem to have escaped the brunt of it.

"Six months ago the top enquiries we were getting related to starting up and growing businesses and now it is more about how to access finance and how to manage cashflow, so it is obvious there are issues."

He said a review of the first year of the new Business Link showed it added £73m to gross added value of the 16,300 Lancashire businesses it advised.

Mr Watson said: "When you think that we started out 15 months ago with 150 staff and now we are at 280 on the payroll, it is fair to say we have come on great strides in the first year. And, of that number I would say 225 are working day-in, day-out with businesses, either face-to-face or through our telephone and online advice services."

He said the service had a budget to increase staff to 320, but would only recruit "the right person for the right role" and had plans to add an extra 20 satellite offices to the 30 it has dotted throughout the region.

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