Chancellor Rishi Sunak has been urged to keep furlough payments at 80 per cent and increase the scheme's flexibility or risk thousands of job losses.

The call has come in a combined letter from the British Beer & Pub Association, British Institute of Innkeeping and UKHospitality, who say they will be unable to pay part of staff's wages under the Job Retention Scheme.

The trade bodies have also asked the Chancellor to introduce flexibility into the scheme before the scheduled date at the start of August, enabling furloughed workers to return part-time when the pubs and restaurants are due to start reopening on July 4.

And they have warned two thirds of pubs will not be able to open with two metre social distancing measures intact.

BBPA chief executive Emma McClarkin said: "Pubs have been closed since March with no income. Expecting many to contribute to furlough costs while they are still closed is madness.

"The decision for the Chancellor is simple, extend the furlough scheme at 80 per cent for our sector until October to save hundreds of thousands of jobs."

While no details have been confirmed about changes to the furlough scheme, the Chancellor is expected to announce in the next week that businesses will have to pay a further one-fifth of the wages of staff.

The trade bodies say thousands of furloughed pub jobs could be lost unless pubs can safely reopen and afford to start paying their staff by July.

They say if the Government adopted World Health Organisation advice and reduced the social distancing gap from two metres to one, three quarters of pubs could reopen at commercially viable levels - as opposed to one third at the moment.

Ms McClarkin said: "Unless social distancing restrictions are reduced to the WHO's suggested one metre, two-thirds of pub jobs could be lost.

"Under two metre social distancing rules, pubs will have less space to operate with so will need less staff."

She continued: "Many pubs won't even be able to reopen, yet they could be expected to cover part of their staff furlough costs from August without any money coming in.

"Such a situation would mean either pubs closing for good or jobs being lost."

Hospitality was one of the first sectors to close when the coronavirus crisis started and will be one of the last to reopen, while 10,000 of the UK's 47,000 pubs are ineligible for any government support.

BII chief executive Steven Alton said: "As the lifeblood of so many of our villages, towns and cities, pubs have been doing incredible things to support their communities, raising money for charity, feeding the vulnerable and caring for their customers throughout lockdown.

"We ask that the Government recognises the importance of pubs, not only for its significant economic contribution and millions of jobs but also to the fabric of our society, by continuing the full furlough support for pub staff."

UKHospitality chief executive Kate Nicholls said it is crucial the furlough scheme is extended in full.

She said: "It is necessary for the survival of vast swathes of the hospitality sector and our employees' livelihoods.

"The reality is that after five months of virtually no earnings, facing start-up costs and additional ongoing costs, businesses will simply not be able to contribute to the furlough scheme from August.

"The sector will only be taking its first baby steps and to expect businesses to go from a standstill to full speed immediately will only lead to venues shutting their doors for good and see staff lose their jobs."