French culinary culture is under threat from excessive law-making which is forcing restaurants into closure or fraud, according to restaurateur and design guru Sir Terence Conran.

He says the two flagship French restaurants he runs are struggling to survive under prohibitive French and EU regulations.

Conran, who owns 22 restaurants in Britain, including some of London's most famous hot spots such as Pont de la Tour, Mezzo, Quaglino's and Bibendum, blames France's 35-hour week and high VAT and social security charges.

'The law encourages fraud because it's so hard to survive if you are honest,' he said. 'My dedicated Paris staff abide by all the rules, and make no money.'

Conran launched his first French restaurant, Alcazar, in 1998 on the fringes of Paris's Latin Quarter. His second, Senso, opened in the exclusive La Tremoille hotel in 2002. Both, he says, are struggling to survive.

His criticisms - made at Raymond Blanc's American Food Revolution weekend at his restaurant, Le Manoir aux Quat'Saisons - have been backed by other high-profile restaurateurs.

'There is a black market element to most restaurants in France because unless you break the law, it is practically impossible to make a restaurant succeed and profit in France,' said Robert Saunders, who co-founded the Neat restaurant in Cannes with Richard Neat in 1999.

Neat received a Michelin star after just seven months, and Saunders was devastated when it was forced to close after three and a half years.

'The French system encourages fraud because their taxes and social security payments are so high that there is an immense temptation to part pay employees in cash and not put other monies through the tax system,' he said. 'Neat in Cannes stayed above the law but we were almost unique in doing so.'

André Daguin, president of the French chefs' association, blames the government for the closure of more than 3,000 restaurants and believes it has led to a drain of French chefs to other countries.

'There is huge pressure on newly trained people to leave the profession because of the long and unsocial hours, and there is a talent drain from France,' he said. 'A 35-hour weekly limit is impossible in these circumstances, and restaurateurs are the prisoners of fiscal laws.'

The French government is increasingly concerned about the problems faced by restaurants and is to cut the indirect tax burden from 19.6 per cent to 5.5 per cent. Social security contributions, however, remain high, at 66 per cent.

But Prue Leith, businesswoman, restaurateur and novelist, says the industry needs more, not less, regulation. 'Everyone agrees that what is happening in France is a disaster but why do more restaurants open every year than go bankrupt? The answer is that some successful restaurants are operating on the wrong side of the law.

'We need to have an end of the system of split shifts, where restaurant employees are expected to take an unpaid break in the middle of their working day. Many young people won't work split shifts because they get no rest and it destroys family and social life.'