Last year satellite pictures showed that almost 10,000 square miles of the world's largest continuous forest was lost, a 40% increase on the 2002 figure.

And this year's loss could be greater, says the internationally funded Centre for International Forestry Research (Cifor).

The destruction is being driven by escalating European demand for beef, amid fears of mad cow disease and foot and mouth in local herds, said yesterday's Cifor report.

EU countries, says the report, now take almost 40% of Brazil's 578,000 tonnes of exported beef. Egypt, Russia and Saudi Arabia between them import 35%.

The US, which has strict beef quota systems to protect its own ranchers, only takes 8%.

"The deforestation is being fuelled by beef exports, with cattle ranchers making mincemeat out of the rainforests," said David Kaimowitz, director general of Cifor and one of the report's authors. He said that logging contributed only indirectly to deforestation.

The Amazon's cattle population more than doubled to 57 million between 1990 and 2002, says the report.

"[In that time] the percentage of Europe's processed meat imports that came from Brazil rose from 40% to 74%. Markets in Russia and the Middle East are also responsible for much of this new demand for Brazilian beef."

But the report plays down US claims that GM-free soya farming for the European market was fuelling deforestation.

"Although the last few years have witnessed a great deal of justifiable concern about the expansion of soybean cultivation into the Amazon, that still explains only a small percentage of total deforestation," according to the authors.

Mr Kaimowitz yesterday warned that the rate of Amazonian deforestation could escalate in the next few years as Brazil becomes entirely free of foot and mouth disease.

"Since 2003, the states of Mato Grosso, Rondonia, and Tocantins have been declared FMD-free, and can sell their beef anywhere they want. These changes have increased prices in the Amazon, and hence the incentive to deforest", say the authors.

The report suggested that giant ranching operations linked to European supermarkets were now dominating the beef export market.

"In the 1970s and 1980s, most of the meat from the Amazon was being produced by small ranchers selling to local slaughterhouses. Very large commercial ranchers linked to supermarkets are now targeting the whole of Brazil and the global market," said Mr Kaimowitz

Two weeks ago, Brazil's President Luis Inacio (Lula) da Silva announced £73m of new measures to restrain deforestation in the Amazon, committing the government to better planning, law enforcement, monitoring of deforestation and greater support for indigenous territories and community forestry.

"The government's approach goes in the right direction, but unless urgent action is taken, the Brazilian Amazon could lose an additional area the size of Denmark over the next 18 months," said Benoit Mertens, an author of the report.

Cifor recommends that the Brazilian government should also try to keep ranchers off government land, restrict road projects that open up the forest, and provide economic incentives to maintain land as forest.