Downing Street has defended Lord Haskins, the prime minister's rural recovery co-ordinator, who is at the centre of a row over the future of farming.

The prime minister's office rode to the defence of the Labour peer who was accused of "crass insensitivity" by farmers after he predicted more than half of them would go to the wall within 20 years.

Tony Blair's official spokesman said Lord Haskins, who is also the chairman of Northern Foods, had "a long background in farming" and spoke with credibility on the issue.

However she stressed that his views were not necessarily those of the prime minister. "He has got his views and is obviously going to express them," the spokesman said. "We want to have a sustainable and competitive farming sector. Lord Haskins has his views and others will have their views."

Downing Street said the prime minister would weigh up all the views presented to him through the review process before considering what action to take to rebuild the farming sector.

On Sunday, Lord Haskins provoked anger from farming groups when he said that those affected by foot and mouth were now better off than those whose farms were not contaminated with the virus.

He told the Sunday Telegraph: "What I know is that in this foot and mouth crisis, the people who have economically come out best of all have been the farmers who have had foot-and-mouth. They have lost their assets but they have got the interest on the money until they re-stock."

He also drew sharp criticism when he suggested that farmers should find day jobs to supplement their dwindling farming incomes.

Lord Haskins was attacked by Ben Gill, president of the National Farmers Union, for causing offence to farmers, crass over-simplifications and being out of touch with reality.

Eurig Wyn, the Plaid Cymru MEP, said the rural recovery co-ordinator was living in "cloud cuckoo land".

"Anyone who knows the remotest thing about farming knows that running a farm is a full-time job. Telling farmers to take on the additional burden of a second job is totally unfeasible, very unfair and wholly irresponsible," he said.

Farmers also fear that Haskins will push the government towards promoting large scale commercial farming to the detriment of the traditional family farm.

"Mass-production and intensive farming has led to serious problems in recent years - not least BSE and foot and mouth. Surely we should be moving away from food production based on intensive methods and globalisation and return to more traditional ways of farming based on promoting high quality local produce which is vital for public health and the sustainability of rural communities," said Wyn.