VITAL repairs are needed to minor roads and rural routes seriously damaged by winter weather, local authorities and business leaders have warned.

Roads risk becoming permanently strewn with potholes unless government invests now in proper resurfacing, said the Local Government Association. And councils face spiralling compensation costs to drivers whose vehicles are damaged.

Last year, highways teams fixed 2.2 million potholes, 500,000 more than the year before. But the backlog in repairs is growing longer, now estimated at £10.5 billion, with one-in-five roads classed as being in 'poor condition'.

The average English authority is £6.2m short of what it needs to properly maintain its roads, according to the annual ALARM survey of council transport bosses, up from £5.3m in 2011. Councils paid out £32m in compensation to drivers last year, 50% more than 2011.

The Local Government Association said councils already bearing the brunt of public sector cuts may find it impossible to keep on top of road repaids should they be stripped of even more funding, alongside existing reductions in highways maintenance budgets,

The association wants the government to free up existing money and invest it in resurfacing the road network. Resurfacing projects would make roads safer and save billions of pounds in the long term – because it costs less than reactive repairs which are 20 times more expensive

Peter Box, chairmain of the LGA economy and transport board, said: "Keeping roads safe is one of the most important jobs councils do and it's testament to this that over the past year they've fixed more than two million potholes.

"Highways teams across the country have been out in force over the past few months assessing the impact of freezing weather and widespread flooding, and many councils have invested in new technology and initiatives to try and tackle the latest batch of potholes."

Damage from potholes is estimated to cost motorists £320m every year. Recent research by the Rural Services Network revealed that some rural councils have seen reductions in government funding of up to 9% compared to a national average of 4.48%.

With councils facing severe budget cuts, the Country Land and Business Association said it was sending out a reminder that minor roads provided a vital lifeline for rural businesses and needed to be well maintained.

CLA eastern region director Nicola Currie said: "In the current economic climate rural businesses cannot afford to be further disadvantaged by having to pay hefty repair bills for vehicles damaged by potholes that should have been dealt with.

"As the ongoing austerity measures continue to bite, we are seriously concerned that cash-starved councils will be tempted to further neglect rural roads, which are a key part of the infrastructure that underpins the rural economy."