Britain's trade with the rest of the world is running even deeper into the red.

National Statistics yesterday reported that the overall deficit of £4.81 billion was only £238 million deeper than in January - but the January shortfall was originally reported as £3.8 billion.

This drastic revision, NS said, arose from later data for oil exports and trade associated with the huge and long-running VAT fraud, much of it in mobile phones.

Trade in goods resulted in a marginal £60 million improvement from a record £6.54 billion deficit in January.

But that was more than offset by a £298 million drop in the surplus from services, which eased back to £1.66 billion.

One bright spot in was a £317 million recovery in exports of capital goods on February, taking the total improvement over December/February to £1 billion, all of it due to rising sales to EU countries.

Trade in oil has also i mproved, returning a £86 million surplus in February after a shortfall of £430 million in January. That helped reduce the oil deficit over the latest three months to £116 million from £865 million in September/November.

Trade in cars quickened between January and February - with imports rising by £104 million, while exports were a relatively modest £28 million higher. Over the latest three months exports of cars have risen by three per cent or £164 million. Imports were five per cent higher with a £286 million increase.

Excluding oil and so-called erratic items - ships, aircraft, oil rigs and precious stones -the underlying trade gap in goods hit an all-time record of £ 6.34 billion after £5.735 billion in January.

NS described the trend for trade in both goods and services as widening in recent months. Volumes of both exports and imports were rising.

Economists said this worsening trend could have held back Britain's overall growth in the first quarter of this year, after providing a brief fillip in the final months of 2005.

John Butler, UK economist at HSBC: said: "A deteriorating trade deficit in a back-ground in which UK domestic demand has underperformed should be treated as negative for sterling."