Payments worth more than pounds 150m, owed on legitimate export deals, have been blocked by government sanctions against Saddam Hussein's regime.
The delay has already caused redundancies and hardship. One exporter, Barrie Rodgers, based in Suffolk, has been told his house will be repossessed next week because of arrears which have mounted since he sent a consignment of medical equipment to Iraq.
The Iraqi ministry of health authorised him to take payment from its frozen bank account in December 1990. The Bank of England at first gave permission for Mr Rodgers to receive his pounds 220,000, then changed its mind because he had not received 'an authenticated inter-bank telex'.
Mr Rodgers said: 'I'm facing losing my company and living in penury because of what my government is doing to me.'
The companies claim Whitehall departments have passed the buck, with the Foreign Office, Department of Trade and Industry and Bank of England saying they are helpless to resolve the problem. Direct appeals for intervention to Michael Heseltine, President of the Board of Trade, and constituency Tory MPs have proved fruitless, exporters claim.
Representatives of the companies, who this week lobbied Richard Needham, the trade minister, claimed government 'inertia' was causing problems to multiply.
Government officials yesterday said Iraqi assets frozen after the invasion of Kuwait remained the property of Iraqi individuals, companies and the regime. Whitehall could prevent payments, but could not authorise them. Esrom 119, a pressure group formed to represent the companies, said the Government could use interest earned on seized cash deposits to safeguard the interests of exporters.Reuse content