BOLTON has been named top of a "business graveyard" list -- but business leaders have immediately hit back at a "misleading" picture.

A survey by the Association of Business Recovery Professionals -- R3 -- revealed that in 2001 insolvency rates were nearly twice the national average with 166 of the town's 4,163 businesses folding. But Bolton's unwelcome position at the top of the list -- one ahead of Manchester -- has come as a surprise to the town's business community.

Mr Andrew Ratcliff, Chief Executive of Bolton and Bury Chamber, said that a recent survey of small businesses by Barclays Bank revealed that Bolton was the eighth best place in England and best in the North-west for fast growth start-ups.

Mr Ratcliffe said: "We are surprised by the figures, which we feel give a misleading picture of Bolton's overall healthy economy.

"Because Bolton is such an entrepreneurial place with a high number of start-ups, it is inevitable that this high risk sector has a higher failure rate."

The survey authors made a detailed study of documents filed at Companies House after insolvency.

They say a business in Bolton is 400 per cent more likely to go under than one in South-west London, where one in every 104 businesses go bust. The national average is one in 50.

R3 president David Buchler said: "Companies in the North-west are being hit hard by the decline in the manufacturing sector and this, coupled with the effects of the global downturn, has led to such high levels of insolvency."

Mr Ratcliff said: "Bolton is adapting well to the challenges of the 21st century and in robust condition for success."

He added: "Bolton has many attractions as a business location, which combined with the great quality of life it offers, makes it one of the best places in Britain to start a business.

Mr Mark Sheen, Senior Tax Partner at Barlow Andrews accountants in Bolton, also added that he was also "very surprised" that Bolton was at the top of the list.

He said: "Lots of our clients are doing OK and some are doing very well. There is nothing at all to suggest that Bolton is any better or worse than it ever was."