Farmers in Skipton have defended foot and mouth compensation payments after two public-spending watchdogs said they were launching an investigation.

Unconfirmed payments of £1 million each to three farmers in the area will be scrutinised by the National Audit Office, which checks spending across Whitehall, and MPs on the Public Accounts Committ-ee.

One farmer, Michael Wall-bank, 45, who runs Intake Farm at Embsay near Skip-ton, said he had received £700,000 to replace 449 prime dairy cattle.

But he defended the amount of compensation and said it was a "fair" amount to replace his herd and to recoup the money he had spent over the years.

There have been suggestions that farmers have cashed in on the outbreak by making false claims.

The Department for Environment, Food and Rural Affairs (Defra) has confirmed that 37 farmers have claimed more than £1 million compensation each for livestock slaughtered in foot and mouths culls.

Reports have circulated about three "foot and mouth millionaires" in the Skipton area who were using their windfalls to pay for new cars and foreign holidays.

Mr Wallbank's brother David, who runs Crakeland Farm in Halton East, Skipton, said he had 200 dairy cattle culled as a result of foot and mouth infection.

He said: "It really isn't compensation, it's what the animals are valued at by the Government before they are taken away and slaughtered.

"If that is what the stock is worth then that's what it's worth.

"In my particular case I have borrowings of almost £500,000 and the value of my stock which was slaughtered wasn't nearly as much as what I've borrowed.

"People don't really have an understanding of the size and scale of the amount of money invested in farming."

National Farmers' Union deputy director general Ian Gardiner said farmers compensated by the Government were not "foot-and-mouth millionaires".

"They have received compensation for the loss of their animals and in the vast majority of cases that compensation will be spent on more animals, as soon as they can restock their farms," he said.

Mr Gardiner said farmers would not blow the money on other things.

He said: "I think you will find that people with pedigree herds who have put their livelihood and often their father's before them into it will want to resume their business."