Premier was the biggest British investor in Burma, with a stake estimated at $200m in a project to pipe gas to Thailand from Burma's vast Yetagun offshore field.

Activists concerned about Burma's poor human rights record have claimed the withdrawal is a victory for their 10-year long campaign against Premier.

But the oil firm insists that the decision to pull out of Burma was related to wider commercial interests rather than political pressure.

Only one battle

A spokesman for Premier told BBC News Online that the oil firm did not breach human rights in any shape or form.

The demise and fall of Premier is a warning to any company thinking about investing in Burma

John Jackson, Burma Campaign UK

But Premier's involvement in Burma has attracted a huge amount of bad publicity, including direct criticism from the British government and Burma's pro-democracy leader, Aung San Suu Kyi.

"The demise and fall of Premier is a warning to any company thinking about investing in Burma," said John Jackson, director of the Burma Campaign UK.

"It's more trouble that it's worth," he added.

But Mr Jackson warned that Premier's withdrawal was only one battle in the war, and vowed to increase pressure on other oil firms, such as TotalFinaElf and Unocal, operating in the region.

Takeover target?

Premier's withdrawal from Burma is part of a $670m restructuring deal which will see the firm also dispose of assets in Indonesia.

Malaysia's Petronas will take over Premier's Burmese assets, and continue to pump gas from the Yetagun field.

The news of the change of ownership came as the firm announced a 20% rise in its six-monthly profits.

Premier will continue to operate in Britain, Pakistan and Indonesia.

In London, Premier Oil shares closed 6% higher 25.75p on the news, with some analysts suggesting the firm would become a more attractive takeover target without its Burmese burden.