The region's bank managers were today told to end a 'computer says no' culture dominating their banking decisions or they would squeeze the pips of small businesses until they went bust.

About 60 small business owners and eight MPs from across the region told managers of HSBC, RBS, Barclays, Lloyds TSB and Santander at a special banking summit in Mundford, near Thetford, that interest rates were too high, service was poor and loans and overdrafts they had previously been given had been stopped.

The session follows a smaller banking forum in Norwich last year.

Peter Martin, regional treasurer of the Federation of Small Businesses, said: 'Small businesses employ 60pc of the people in the country. They are the lifeblood of the country. It seems that from the point of view of our businesses and our customers that the computer says no.

'If you squeeze the pips until the business goes bust you will have no customers next year. We are talking about businesses which are hard working and are profitable. We are not talking about shady deals.

'We have seen interest rates increase dramatically despite base rates having gone down. Charges for other things have come in which weren't there before. We don't know what the value of the charges other than the value to those charging them. One member in Suffolk was sent a letter have a better service if he contacted a call centre in Birmingham.'

But James Cliffe from Barclays said that while the base rates were low, the banks could not fund themselves on that.

He said that banks were losing money on loans of 2.5pc over base rate and they needed to maintain their profitability, while the Little Britain 'computer says no' caricature was perception not reality.

'It is like when I use my computer to write a letter,' he said. 'I use spell checker but it is not the answer. The decision is also made by a person.'

Carl Woodwards, senior manager commercial at the North Norfolk Group of Lloyds TSB said: 'When a business is in a difficult situation and is looking to raise extra money how I see it we have got a responsibility to do the right thing for the customer, but we have also got a responsibility to do the right thing for the bank and the wider community.

'If a business does cease trading it's taking into account the consequences of unpaid suppliers, the money that is not paid to HMRC alongside what the bank is owed. If you borrow money it has got to be paid back.'

Will Bridgeman from Warren Services said: 'We are an engineering company in Thetford. We employ 80 people. We want to grow the business even more and we have employed an extra 20 people. Two to three years ago we were told we couldn't have anymore overdraft. We were overdrawn from a couple of weeks then we were in credit more than we were overdrawn.'

'We were forced into finding more expensive forms of finance. It is definitely more expensive for us in cash terms.'

South West Norfolk MP Elizabeth Truss, who organised the meeting, said: 'The terms of funding is changing, there are high demands for interest and a computer says no culture.

'Quite often these business have been with the bank for years,' she added.

She said that the government was trying to deal with the problem. Initiatives included the Vickers report and a look at ways of making it easier for customers to change banks.

'I don't think that is enough to assist with the short term issues of finance,' she said.

Treasury minister and North Norwich MP Chloe Smith said the government was trying to lower interest rates for small businesses with its loan guarantee scheme which guaranteed bank loans, as well as through its business finance partnerships which cut out the banks as lenders, and also an enterprise guarantee scheme.

'These are vital steps in unlocking new funding,' she said.