Political support for the dairy industry surged in the days before Parliament closed for the summer recess, with allegations of an illegal cartel in milk levelled against four multiples by the MP for Penrith.

David Maclean, former Tory chief whip, claimed that Asda, Sainsbury's, Tesco and Marks and Spencer were fixing prices while dairy farmers were forced out of business at the rate of ten a week.

Urging the government to step in and save the dairy industry, Maclean said that the OFT had failed to realise what was happening.

The "cartel", he explained, was achieved simply by each chain checking the other's websites to keep their prices in line. "For the OFT to say there is no evidence of collusion is simplistic. Of course the supermarkets do not need to collude - one cuts the price, the others look on the website and they all follow. It is a cartel, it is ruthless, it is grubby, and it needs to be stopped."

But his accusations were dismissed by the OFT. A spokeswoman said: "Looking up price information of a competitor on the internet does not, on its own, provide reasonable grounds to suspect cartel behaviour."

Meanwhile, 20 MPs rallied to the support of cheese producers after a week of negative publicity about levels of salt and fat.

They joined to form the all-party parliamentary group on cheese under the chairmanship of Dan Rogerson, who represents the Cornish constituency that contains Dairy Crest's Davidstow creamery.

It set its targets on the FSA's proposed traffic-light labelling. "The group is concerned that government recommendations will result in children and adults missing out on important vitamins and minerals," said Rogerson.

This is now the third all-party parliamentary group in the dairy sector.