London's Chinese and Indian restaurants have been handed a lifeline after the Government eased the threat of restrictions on the recruitment of chefs from outside the EU.

The Migration Advisory Committee (MAC) has outlined which businesses can apply for work permits for employees from beyond Europe's borders to cover skills shortages.

It said chefs will qualify for a permit as skilled labourers, as long as they cover a genuine shortage and are paid at least £8.10 an hour, lifting the prospect of an immigration ban on all but the most highly qualified chefs.

Restaurant owners in Chinatown were braced for huge losses and restaurant closures claiming untrained British or EU chefs would struggle to cook specialist food, or adapt to long working hours and low pay.

Jabez Lam, of the Chinese Immigration Concern Committee based in Leicester Square, said: "We were facing disaster because working in a Chinese restaurant takes specialist skill and knowledge - without trained chefs there would be no-one to cook. So it is a relief the Home Office has gone some way to recognising this."

The MAC's climbdown is well timed, coming as soaring food prices and weakening consumer spending bite into restaurant profits.

Bajloor Rashid, president of the Harrow Road-based Bangladeshi Caterers Association, welcomed the announcement, but urged the MAC to broaden the definition of a skilled worker.

"This helps but we want waiters and kitchen porters included in the rules too. Equally the £8.10 minimum wage is well above the average £7 an hour paid to chefs so many smaller restaurants will feel that in their tills. It's a help but not a solution and we'll keep lobbying the Government to let us bring in specialist workers."

The Home Office wants to limit the number of migrants to the UK, claiming staff shortages can be met by EU nationals and British workers. It wants to create skills from the exisiting pool of labour in an effort to stem imigration.

Officials also raised concerns over the working conditions and pay given to catering staff in many ethnic restaurants - which are traditionally seen as an entry point to the UK.

The MAC says the new list will be reviewed after two years.