War costs tourism £1 billion

London's tourism industry faces massive losses of almost £1billion because of a slump in visitors caused by the war in Iraq, official figures reveal today.

Sales in the capital's busiest shopping areas, Oxford Street and Regent Street, have fallen by up to one fifth due to the lack of overseas tourists.

The figures will be revealed today by Mayor Ken Livingstone's chief economist John Ross at a conference on the effects of the conflict.

Mr Ross will say the war has kept business and consumer confidence low, slowing the recovery in London. He calculates losses of £110 million between April and June and that if the trend continues throughout the year, the total cost will be £360 million.

But predictions from government agency Visit Britain that tourism will fall 15 per cent compared with 2002 would cost £870million by January, Mr Ross warns.

"London's tourist economy is recovering from the deepest levels around March 2003. What we do not have is recovery in the long-haul North American market," he said.