BRITAIN'S tourism industry stands to lose about £2.5bn this year as a result of the terrorist attacks in the US and the effects of the foot-and-mouth outbreak, tourism chiefs said yesterday.

Spending by overseas visitors in Britain, originally forecast at more than £13bn for 2001, was likely to be about £10.8bn, the British Tourism Authority (BTA) said.

David Quarmby, chairman of the BTA, said: "The tourism industry is facing an unprecedented situation - a drop of nearly 20 per cent.

"It's been something of a double whammy year for tourism. It's the cumulative effect of the foot-and-mouth outbreak since March and the terrorism attacks in recent weeks."

He said the situation could worsen if military strikes were launched and predicted 75,000 jobs could be at risk.

Mr Quarmby added that London was the worst affected area, although York, Stratford, Oxford, Edinburgh, Cambridge, Chester and Bath had also been badly hit.

The figures have been put together by the BTA using market intelligence provided by its offices throughout the world, and by talks with several industry partners.

The authority predicted that Britain's key long-haul market, including the US, Canada, Australia and Singapore, would all see significant falls in visitor numbers in the last quarter of this year - conservatively estimated at between 15 and 25 per cent.

Latest figures show that last year there were 25.2 million overseas visitors to the UK, who spent £12.8bn - making tourism one of Britain's most important industries.