The report shows the number of young fish has increased

But the International Council for the Exploration of the Seas (Ices) said further cuts were needed to ensure the long-term future of the industry.

It called for catches to be cut to less than half their 2006 levels.

The Scottish Fishermen's Federation said the report proved that sacrifices made in the past were working.

The full Ices report will be published later this week ahead of the annual round of EU fisheries negotiations in Brussels.

In last year's Brussels talks the commission recommended a 25% cut in the permitted maximum cod catch for 2007, but that was whittled down in negotiations to 14%, coupled with a reduction in the number of days permitted at sea.

We recommend constraining catches in 2008 to less than 50% of the 2006 catches Martin Pastoors Ices

This year, the Ices scientists repeat their long-standing warnings that fishing pressure in the North Sea has been too high for a species that declined in the late 1990s and early 2000s.

Martin Pastoors, chairman of the Ices' fishery management advisory committee, said: "Our scientific surveys show that the number of young fish has increased, although to only half of the long-term average."

These young fish could make a "substantial" contribution to the recovery of North Sea cod stocks, and there had been a welcome reduction in fish mortality.

But he warned: "It is not enough. We recommend constraining catches in 2008 to less than 50% of the 2006 catches.

"And this should include measures to constrain discards and illegal catches. This should give these young fish the opportunity to grow and to reproduce and thereby to contribute to the recovery of this important fish stock."

'Painful measures'

Scottish Fishermen's Federation chief executive Bertie Armstrong said the report contained "much encouraging news" for the Scottish fishing industry.

He said: "For the mainstay Scottish stocks, we are delighted to note that sustainable harvesting is recognised. For the iconic cod, at last we have scientific confirmation of the fishermen's observations - the stock in the North Sea is recovering.

"This vindicates previous painful measures including the decommissioning of 65% of the Scottish whitefish fleet.

"Protection of the increasing stock is at the centre of the Scottish industry's approach to the negotiations for catching opportunity in 2008, which will be based on the science described today."

The Scottish Government said the Ices recommendation, if implemented in full, would mean less than 30,000 tonnes of cod could be caught next year.

But a spokeswoman went on: "The significant thing is that this is the first time in over six years that Ices has not called for a complete ban on cod fishing.