Unions and politicians are warning of further job cuts in the North Sea oil industry after BP announced the loss of 800 contractors' positions.

The announcement comes on top of 500 job losses earlier this year.

The new round of cuts will be spread among contract staff in Aberdeen, offshore, Sullom Voe in Shetland, Bacton in Norfolk and Hartlepool on Teeside.

These losses once again highlight the fragility of the Scottish labour market

Andrew Wilson SNP MSP

The Conservative Member of the Scottish Parliament for North-east Scotland blamed the reductions on the chancellor's introduction of a new oil tax in the last Budget.

In March, unions promised to resist any compulsory redundancies when BP announced 500 jobs would be cut from its North Sea operations.

This was followed by a review to determine the number of contract posts.

'Mature phase'

A spokesman said on Friday: "Yesterday we completed that [review] and 800 jobs are to go.

"Some of those 800 people will be redeployed by the contract companies."

David Davidson, Tory MSP for North-east Scotland region said: "Prospects for the oil industry have already been bleak with the North Sea province coming to a mature phase of development and a consequential decrease of production.

David Davidson: "Family concerns"

"But the chancellor's new supplementary 10% tax on oil has done nothing to help the industry.

"The loss of 800 contactors will be a devastating blow for the 800 families and local businesses who depend on these contractors to survive.

"My greatest fear is that this is only the start of bigger job losses in the industry and I urge the chancellor to think again."

Norwegian model

The Scottish National Party's economy and enterprise spokesman, Andrew Wilson, said: "These losses once again highlight the fragility of the Scottish labour market and leave hundreds of families across Scotland facing a very uncertain future.

"The scale of these job losses only confirms the need for a future generations fund, modelled on the hugely successful Norwegian scheme, so that the economic benefits from North Sea oil can be invested to provide security for generations to come."

Jake Molloy, of the OILC union, was not optimistic about the prospects of the job losses being offset by other parts of the industry.

BP says the industry's future must be safeguarded

He said: "When BP and Shell, the big players, move in this direction it is most likely that the others will follow suit.

"So there is no danger of soaking this up at all."

Andy Baird of the Transport and General Workers Union said the announcement was "another bitter blow" to the economy of North East Scotland.

In March, BP announced that 200 jobs would go its Aberdeen headquarters and 300 more at onshore and offshore operations.

'Domino' warning

Unions warned of the "domino effect" that would be caused by the job losses.

They said that once there was a reduction in one part of the organisation it has an effect through every part of the business, from engineering and drilling to the catering divisions.

BP employs about 3,300 people in the UK in upstream oil and gas exploration and production activities.

Most of the 1,800 onshore staff are employed in Aberdeen, while the remaining 1,300 work offshore.

A further 3,300 agency and contract workers are employed by the company, which is responsible for about a fifth of the output of Britain's North Sea offshore oil and gas fields.