On Tuesday, business secretary Lord Mandelson announced that eligibility for the scheme will be backdated to include suppliers that have had cover reduced since 1 October 2008.

It will also consider offering credit insurance where a company has had their cover withdrawn completely since 1 October, but has since had cover partially reinstated.

A credit insurance protection scheme was launched as part of April's Budget, but came under fire for its limited scope and consequentially poor adoption rates.

Speaking in this week's PrintWeek, Richard Miller, business development broker of trade credit specialists IRC, said: "This is an excellent move and the fact that the government will now take into account situations where a company has had their cover withdrawn rather than just reduced is key."

The scheme works by enabling a company to purchase top-up cover if a credit limit is reduced, through a broker or underwriter. The insurers will then run the scheme on the government's behalf. However, it received a muted response from the print industry and was criticised for only including companies whose credit had been reduced rather than removed completely.

Shaun Purrington, regional director of credit insurance giant Atradius, welcomed the changes. He said the original scheme, despite "considerable interest", had had lower than expected take-up.

Credit insurance broker Aon had been lobbying for the scheme to be extended to include limit reductions prior to 1 April 2009. However James Bowker, Aon account director, warned against a full scale government insurance scheme that ignored the fundamentals.

He said: "There is a school of thought that a top-up scheme covering nil decisions is to an extent prolonging the agony by supporting companies which are earmarked as possible insolvency candidates."