Small Bradford firms could be forced out of business if the Home Office axes a law to allow them to claim compensation for damage caused during riots, it was claimed today.

Bradford Chamber of Commerce said it had written to the Home Office to object to any moves to repeal or reform the 1886 Riot (Damages) Act which is currently under review.

Today officials at the chamber said that, if the law were scrapped, some businesses would face an intolerable increase in their insurance premiums to protect against damage caused by riots.

And they said that could force some companies out of business and make others relocate to areas with lower premiums.

Under the current legislation, firms are given two weeks after a riot has taken place to claim compensation for any damage caused as a result.

The review was launched earlier this year after it was estimated the West Yorkshire Police Authority could be left to foot a £7.5 million bill for damages caused during the 2001 riots. The force has asked the law to be repealed "as an anarchic piece of legislation" or, at least, reformed.

But chamber president Roland Clark said a safety net must be provided for small and vulnerable businesses.

"We can understand why the review is taking place," he said, "There have been additional burdens put on police authorities, especially our own in West Yorkshire, due to those riots. But we don't think that justifies transferring additional costs to business - mainly small firms - who have already been hit with high insurance premium hikes since 2001 for other reasons, and who bear no responsibility for the actions of rioters.

"Many small firms would simply be unable to afford the additional insurance cover. There also needs to be a clear public responsibility for dealing with riots."

Chief executive Sandy Needham said that, while individual claims were relatively low, they could still have an impact on a company's performance and accounts.

"The consultation states that, since 1995, 90 per cent of claims were from small firms, and that most ranged between £500 and £7,000. The suggestion seems to be that these are fairly insignificant figures for a business but, when accumulated, have a damaging effect on police authority budgets.

"We would turn that argument on its head and say that, to a small firm reliant on trade that has been built up probably over a number of years, the impact of the riots was costly and disruptive to their business."

Naweed Hussain, chairman of the Oak Lane Shopkeepers Partner-ship, said firms in his organisation were already being penalised with higher insurance premiums which often excluded terrorism and riot damage.

"This is very daunting for a lot of small businesses," he said.

"A lot of these are family-run firms which cannot choose to locate elsewhere and may, instead, simply be forced to close.

"The Government needs to play a part in helping overcome this problem."

Denise Wilson, policy development officer for the Federation of Small Business in Yorkshire, said the long-term prosperity of areas such as Manningham depended on small firms thriving there. We have already seen massive hikes in insurance liability and some businesses are already operating without insurance because of that," she said.

Chamber members raised their concerns about the review at a recent meeting of its local affairs committee.

Their feelings have been forwarded to the British Chambers of Commerce and Home Office.