Nepal's carpet industry has been a lucrative source of foreign earnings for one of the world's poorest countries, but its reliance on child labour has been heavily criticised.

Children toil for hours, operating looms in atmospheres choked with dust. Respiratory and eye diseases caused by fluff from the carpets are rife. Child workers miss out on education and the factories are recruiting grounds for girls and women who are sent to brothels in India and the Middle East.

Two social anthropologists at the University of Edinburgh have devised a programme to integrate the activities of foreign researchers and policy-makers. This programme could transform the lives of the Nepalese child labourers and those of thousands more youngsters in India and Pakistan.

Rachel Hinton and Rachel Baker were frustrated that their academic research was not having a practical impact on the lives of working children. Dr Baker said: "We recognised that a lot of research fails to influence policy. We needed to get the policy-makers to see for themselves how their programmes affected the lives of children and their families."

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Dr Hinton added: "In the past, foreign researchers have done research, local policy-makers have made policy and there has been little interaction between the two. The Edinburgh programme is the first to bring these groups together.

"Nepal is a poor country, but its children have rights to education and health. If work is within reasonable limits, it can enable children to go to school, but it can be exploitative and hazardous.

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"The carpet manufacturers used to be suspicious that we were going to attack the industry - but they are now joining in because our support enables them to comply with international regulations. Bad publicity threatens their markets.

"The Nepalese government wants a product that it can put on the international market without violating the rights of children. The carpet factories are a major source of income - if it were cut off, families would not be able to send children to school and children would be less well-nourished."