British firm linked with Gadaffi torture

The Chancellor said profits from older "brown field" North Sea oil and gas fields will be spared from paying full duty to encourage investment and ensure they are fully exploited.

It marks the latest in a series of reliefs introduced for the industry.

Industry body Oil and Gas UK said the announcement could spark 50 years of activity in the North Sea and attract at least £2 billion of investment in the short term.

But environmental charities criticised what they argued was a whopping handout.

Greenpeace's policy director Mr Doug Parr said: "It doesn't look like Osborne cares one little bit about a true British growth sector or about our planet.

"Our clean energy sector accounted for a third of all growth in the last year.

"Yet this massive handout to his polluting mates is yet another obstacle thrown in the path of Britain's green industries.

"The Arctic sea ice is melting to record levels and he shoves millions of pounds into the pockets of those responsible.

"There's no way he should be doing that. Instead, he should be channelling Treasury support to the new, clean 21st century industries like renewable energy, instead of throwing our money at a declining industry in the North Sea in an attempt to get every last drop of oil," he said.

And Friends of the Earth argued that the Chancellor should urgently be trying to wean the economy off fossil fuels "not subsidising its addiction."

The charity's head of campaigns Andrew Pendleton said: "Cash-strapped households and businesses have been struggling with the soaring cost of gas and oil for years and, with experts predicting future price hikes, a long-term approach is needed.

"It's time to stop scraping the bottom of the barrel on energy policy - we should invest in clean British energy from the wind, waves and sun as well as cutting waste to create jobs and give us power we can all afford."