FEWER businesses went bust over the past year, according to figures which expose a north-south divide in survival rates for firms.

While the number of failed businesses fell by almost six per cent to 40,847 compared to 1999, the tally for the North of England went up.

Business information service Dun & Bradstreet, which carried out the study, said the regional divide created cause for concern.

Most areas saw a fall in the number of business failures. But in the North of England there was a different story, with the number of business failures rising.

Failures increased slightly in the North West by 1.1 per cent, from 4,749 to 4,802, or 11.8 per cent of the total failures in Britain. The number of companies going into liquidation fell 6.3 per cent, to 1,973 (from 2,105), but bankruptcies were up seven per cent to 2,829 (2,644). The first three months of last year were the worst for businesses crashing, with 1,350 going under in the North West.

The worst hit area of the country was the North East, where a near 12 per cent increase pushed the figure to 5,422 (4,848).

The decline in the number of businesses going bust was more than three times as rapid in London, where only 4,697 firms failed, almost 22 per cent lower than last year.

In South East England, the figure of 7,640 was 7.7 per cent lower, while 10 per cent fewer South West businesses went under, leaving the region with 4,590 business fatalities for the year.

There were also declines in the east, East Midlands, West Midlands, Wales and in Scotland, where different bankruptcy rules apply.

Phillip Mellor, senior analyst for D&B, said the results brought a mixed message.

"This news is good Christmas cheer for the business world, particularly in London and the south and east," he said. "It is also heartening to see the rate of business failure falling in the manufacturing heartlands of the Midlands.

"But the split between north and south must be a cause for some concern, particularly if the current economic climate begins to slow down as a result of a fall in growth rates from across the Atlantic."

He added that the main beneficiaries of the decrease in failures appeared to be larger businesses, where liquidations fell by 11.4 per cent, against the 1.6 per cent drop recorded by smaller firms.