The 11th survey on business recovery shows the Midlands and the North West have the highest insolvency rates in the country whilst companies in the South are far less likely to go to the wall.

Bolton and Manchester were dubbed the country's 'busiest business graveyards' in the survey, followed by Bradford, Halifax and Dudley.

Together, Bolton and Manchester saw 828 businesses go bust last year. Bolton alone lost 166 of its 4,163 businesses, or one in 25, compared to the national average of one in 50. Manchester, the UK's second biggest city followed closely with 1 in 28 businesses failing.

The survey, carried out between January and December 2002, shows the North West as a whole has the second-highest levels of business failures followed by the Midlands.

R3 president David Buchler said: 'Companies in the North West are being hit hard by the decline in the manufacturing sector and this, coupled with the effects of the global downturn, has led to high levels of insolvency.'

He added: 'The South appears to be riding the downturn with some success. The power of consumer spending seems to have stoked the southern economic boiler.

Although London, particularly the City, has experienced round after round of job shedding, these companies seem to have survived by cutting overheads and slashing budgets.