UNINSURED homeowners and businesses caught up in the racial disturbances which tore through Burnley have missed out on any chance of compensation -- after police declared the incidents were not a riot.

The move, backed by Burnley MP Peter Pike, has prevented the force being landed with a massive bill to cover the cost of compensation payouts made by insurance companies but also means that anyone who was uninsured has missed out on their last chance of financial help.

Burnley's deputy mayor and community leader Rafique Malik today insisted the incidents were a riot and all people who suffered losses should be compensated.

For two nights in June Burnley gangs -- both white and Asian -- rampaged, torching cars and properties indiscriminately. A period of unrest followed.

But unlike the troubles in Oldham and Bradford, which police described as riots, Lancashire Police only ever said the incidents in Burnley were "a serious disorder."

This means the police will not be liable to cover compensation payouts made by insurance companies. And it also means that a number of people who did not have insurance have been left in limbo.

Mohammed Sarfraz and his family narrowly escaped being burnt to death during the disturbances.

The family have been receiving counselling since the night in June when a gang gathered outside their home in Oxford Road, Burnley, set fire to their car and then petrol bombed their home and shop.

Mohammed, 36, said: "I sank my life savings into the business. I have been here three and a half years with no problems.

"My customers are both English and Asian and until that Sunday we all got along fine together."

He added: "I estimate that this has cost me between £65-80,000 and I was not insured because of my financial situation at the time.

"What I want to know is why the chief of police doesn't say this was a riot.

"These people who came to my house and caused all this trouble didn't just fall from the sky, they must have come from the Colne Road area."

He said his family had not been able to live in the property because it was gutted although he was still able to run the shop.

Mohammed said he had not approached the Task Force set up to investigate the troubles but said he had approached local councillors and MP Peter Pike who told him there was unfortunately nothing they could do because he was uninsured.

Coun Malik said: "There's no two ways about it Burnley had a race riot with shops and cars burnt out and property damaged.

"This is an issue I raised at an early stage with the council and police. I knew that when there were race riots in Brixton in the early 80s that people with businesses that were destroyed were given compensation.

"The only difference between Burnley, Bradford and Oldham is that here Asian community leaders went out among the rioters stopping them from injuring the police."

He said he believed that people who were under-insured or not insured, should be compensated.

The law which has rendered Greater Manchester Police liable for payouts is the Riot (Damages) Act of 1886. It was introduced to penalise police who failed to stop people causing trouble in the streets by acting in a 'riotous' way.

GMP Police Authority's emergency committee met in private yesterday to discuss the bill for damage.

The final figure is expected to top £2m, some of which is expected to be paid from the authority's own insurance. They are currently investigating whether the Act makes them liable to cover uninsured losses.

A spokesman for Lancashire Police said: "Unlike in Oldham we never had a riot situation in Burnley because the two opposing groups never actually met.

"We have already received a number of claims both from insurance companies and private individuals as a result of damage caused, but we never called it a riot and our understanding is that we are not liable.

"We are looking at a number of issues at the moment, including whether we would have been liable to cover the costs of uninsured people if the disturbances had been classed as a riot."

Burnley MP Peter Pike today said: "The police are absolutely right. It was a serious disturbance not a riot.

" Businesses and others who suffered loss or damage should claim on their insurance rather than from the police.