Fears of public alarm over mad cow disease preoccupied Government officials at the time Ministers were first informed of the problem, the BSE inquiry heard yesterday.

A confidential memo to a Junior Minister at the Ministry of Agriculture in July 1987 warned that ill-informed publicity could lead to ''hysterical demands for immediate draconian Government measures''.

The memo from the head of the ministry's Animal Health Division, J C Suich, and addressed to the then parliamentary secretary Donald Thompson, added: ''This in turn could alarm other countries and lead them to prohibit imports of cattle, semen and embryos from this country.''

The note said officials thought the best plan was to acknowledge the existence of BSE and emphasise that it was being thoroughly investigated.

Until more was known about the disease, ''no action by MAFF is recommended beyond attempting to ensure that publicity is well-informed and not unduly alarmist'' said the memo, which was submitted to the inquiry.

Ministers were first informed of the existence of BSE a short time earlier, on June 5 1987, in a note to Mr Thompson from the Chief Veterinary Officer Howard Rees, the inquiry sitting in Lambeth, south London, was told.

This was about seven months after BSE was identified as a disease in its own right by scientists.

Sir Michael Franklin, Permanent Secretary at MAFF until October 1987, learned of the disease at the same time as the parliamentary secretary. Giving evidence yesterday, he defended the actions of officials in light of what was known at the time.

Sir Michael told the inquiry: ''I think it is very understandable that when you have a new phenomenon about which you know so little there is a danger that it can be misunderstood and misinterp-reted. It would be the concern of the CVO not to arouse undue alarm and concern. I think it was an understandable concern. It was not the only one or the primary one.''