Tax officials have agreed to review their policy banning farmers from using red diesel at agricultural shows.

HM Revenue and Customs was criticised for being “heavy handed” after officials told farmers who had volunteered to set up the Wooler show in Northumberland they would be penalised for using red diesel.

Show organisers were advised to buy a tractor for the show to avoid any charges, even though it would only be used for two or three hours a year.

In a letter to chancellor Alistair Darling, SNP MP Stewart Stevenson said the advice was “completely disproportionate”.

“Agricultural shows are one of the mainstays of the rural calendar and many of them rely on voluntary assistance from local farmers,” he said.

HMRC admitted its advice was a “disproportionately expensive way” of solving the problem.

It agreed to review the role of red diesel at agricultural shows and said it would consider giving a duty rebate to those who bought regular petrol at the Wooler show.