A new report has painted a further gloomy picture of the prospects for the North Sea oil and gas Industry.

Oil and Gas UK said exploration has fallen by more than 50% in the last year.

The trade organisation is warning that large sections of the North Sea infrastructure could be decommissioned prematurely, signalling an early end to the industry.

They want the UK Government to act to reverse the downward trend in exploration and investment which they believe is threatening 50,000 jobs.

Oil and Gas UK Chief Executive Malcolm Webb said: "While the changes to the tax regime announced in the Budget were a step in the right direction, they were not enough to lead to a rapid increase in activity.

"DECC and the Treasury must work together to introduce further measures addressing these worrying trends. We fear that if they do not, the rate of decline in production will accelerate, leaving billions of barrels of oil and gas in the ground, perhaps never to be recovered."

Forty per cent of oil reserves remain to be exploited.

However it is claimed the impact of high exploration costs, low energy prices, lack of affordable credit and the global recession is hitting the industry, investment and recovery of those reserves.

Industry leaders said rising costs and tax have stifled investment by 20% in the two years from 2006 to 2008.

The report also shed light on the huge contribution that oil and gas activity makes to the economy.

The sector supports 450,000 jobs with £5billion worth of expertise exported around the world.

The Oil & Gas UK 2009 Economic Report was published on Wednesday.  (Read the full report)