Critics say Tesco is giving to dairy farmers with one hand and taking away with the other after the retailer struck a tough deal with cheese suppliers.

Farmers' leaders said they were disappointed not to see a bigger increase in the price Tesco pays for cheese. In a recent Tesco tender commodity cheese prices rose by between £50 and £70 per tonne - up less than 3%.

The move contrasts with Tesco's announcement in April that it would pay farmers up to 5p per litre more for liquid milk, equating to a 25% increase. It has launched an advertising campaign promoting its support for dairy farmers.

"It is no good Tesco announcing positive initiatives on one hand while putting the squeeze on with the other," said Lyndon Edwards, chairman of the RABDF. "We want fair trade for farmers across the board."

Farmers For Action chief David Handley added: "Tesco's morality on cheese is totally different from its speak elsewhere. It is holding the price of cheese down through its buying strategy."

Prices should be going up to reflect market realities and costs of production, agreed James Withers, deputy chief executive of NFU Scotland. "Tesco has recognised the need to move on liquid milk, but the same principle applies whether milk is going into cartons, cheese or any other product," he said.

Tesco pointed out that it had raised its cheese prices. "This tender is unrelated to the announcement on liquid milk," a spokesman said.

But cheese manufacturers said supplies were tightening and price increases were inevitable. "I would expect brand owners to push for a 20p to 25p rise on a 400g block, which would equate to a £500 per tonne rise at retail and £300 to £350 for wholesale," said one source.

Jeff Halliwell, boss of Asda supplier First Milk Cheese Company, said it had been two years since there had been a price

increase and that rises were inevitable.

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