The field lies off the west coast of Shetland

The Clair field was discovered 24 years ago and is thought to have deposits of up to 5m barrels of oil.

The field has remained undeveloped as the industry viewed it as being difficult to develop.

But technological advancements in recent years changed this view and BP, along with partners ChevronTexaco, Conoco, Amerada Hess and Enterprise Oil, now see it as viable.

Industry experts believe that the initial recovery figure is about 250m barrels of oil.

The consortium spearheading the development still has to receive official clearance from the government, although this is expected soon.

'Technical difficulties'

Scott Urban, group vice-president for BP's North Sea operations, said the company was "delighted" the project was going ahead.

He said: "When Clair was discovered we knew we had a challenge on our hands to develop the field, given the technical difficulties at that time in doing so.

"But I'm pleased to say that technology has advanced to the point where this difficult development is now viable.

I am sure that the offshore oil industry with the aid of advancing technologies has a positive future for years to come

Scottish Secretary, Helen Liddell

"The development of Clair represents a significant investment for all the co-venturers.

"It also shows that there are still opportunities to invest in the North Sea and Atlantic areas of the UKCS. I believe there will continue to be for many years to come."

The Scottish secretary said: "The Clair field is the largest undeveloped resource on the UK continental shelf and should provide an excellent opportunity to create Scottish jobs in this important sector.

"I met Scott Urban, vice president for BP's North Sea operations in Aberdeen last month, and know that the company has shown a great commitment to Scotland and is an important provider of jobs in this area.

Brian Nixon: "North Sea is still an exciting place"

"Their progress in developing the Clair field project shows the continuing possibilities in the North Sea and Atlantic areas and I am sure that the offshore oil industry with the aid of advancing technologies has a positive future for years to come."

The move was also welcomed by Brian Nixon of Scottish Enterprise Grampian.

He said: "I really, truly hope that it will inspire the future generations of Scottish engineers and the future generations of Scottish entrepreneurs.

"These engineering talents and skills are very much in evidence in our industry today.

"I hope that Clair will help to reinforce the message that the North Sea is still a very exciting place to be and that the future of the industry is really strong."