Most of the jobs will be created in Scotland

It says this will protect jobs that might otherwise be at risk and will create about 25,000 new jobs - the majority based in Scotland.

A spokesman for ILT predicted that offshore fabrication yards would not see a big boost because the industry is moving towards hi-tech developments, such as sub-sea tie backs to existing platforms.

But he predicted new jobs in the drilling sector and the contracting sector - particularly for companies involved with hi-tech work.

Investment plans

ILT member Danny Carrigan, national officer at the AEEU, said "It is impossible to overestimate the importance of this investment being realised, just for its effects on employment alone.

"We have been looking at a gloomy situation in this sector over the past couple of years, but now we have some real signs of an upturn and turn-around in job prospects."

ILT is also forecasting that, contrary to previous estimates, oil and gas production in the UK continental shelf could rise for the next three years if investment plans for 2001 and beyond are achieved.

It believes that combined production will peak in 2004 and predicts that Britain's self-sufficiency in oil and gas can be extended.

Only last month oil giant BP unveiled plans for a �2.75bn investment in the North Sea over the next three years.

Experts predict �4bn will be invested next year

The announcement included a major step forward for the much-anticipated �500m Clair project west of Shetland, on which construction work could start in 2002.

Hundreds of jobs are also to be created by a �300m gas pipeline which will help secure the long-term future of the Sullom Voe oil terminal on Shetland.

That followed Shell's announcement of six new oil projects which will see spending rise by 20% to $1.2bn next year.

The news also comes on the day that new figures showed that Scotland's oil industry is booming thanks to the high price.

Despite a downturn in production, the value of the output from Scotland's oil producers rose by 7.8% - up by 48.9% on the previous year.