Energy giant Shell has slashed a multi-million pound oilfield investment programme by a third - blaming the move on the tax hikes by Chancellor Gordon Brown.
The company said it had been planning to hire three drilling rigs for exploration but had decided to cut that to two.
The move follows the doubling by the Chancellor in his Pre-Budget Report this month of corporation tax on North Sea producers from 10% to 20%.
A Shell UK spokeswoman said: "We are disappointed by the Government's recent decision and we are continuing to evaluate the impact that the proposals might have on our business."
Shell has interests in about 50 oil and gas platforms in the North Sea, and owns 21 outright.
The three extra rigs were to be hired to cover new exploration projects over the next few years at a cost up to £140,000 a day.
Labour's political opponents seized on the announcement and claimed jobs in the industry, which employs more than 260,000 people, were under threat because of tax raids by Mr Brown.
Conservative Shadow Scottish Secretary David Mundell said: "On the day of Gordon Brown's pre-budget statement, he was warned of the possible dire consequences of his raid on the oil companies.
"This news confirms our worst fears - Gordon Brown's massive tax hike is going to prove bad for Britain and bad for Scotland."
Despite a fall in production, the energy giant's profits soared to record highs in 2005, on the back of rising oil prices.
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