CENTRICA'S decision to mothball of one the UK's largest gas fields last night re-ignited fears that new energy taxes could be set to hit North-East jobs.

Leaders in the regions energy sector voiced concerns following Chancellor George Osbornes surprise decision in the Budget to impose a £2bn windfall tax on oil and gas companies.

George Rafferty, chief executive of Durham City-based NOF Energy, is among those critical of a policy which could have a major impact in the North-East, a leading supplier of services to the industry. "It is not only the oil and gas producers who will be affected. The impact will cascade down the supply chain, which is where North-East firms will really be hit," Mr Rafferty said.

Last week, the trade body Oil and Gas UK warned that at least 25 oil and gas projects worth a total of £12bn were unlikely to go ahead unless the tax regime is changed, and that 20 fields could have their lives shortened by five years because they would become unprofitable more quickly.

British Gas owner Centrica said that it doesnt make any financial sense to re-start production at its Morecambe South gas field, which it closed for maintenance a couple of months ago.

In his Budget, Mr Osborne raised a supplementary tax on oil and gas production from 20 per cent to 32 per cent to fund a cut in fuel duty.

Centrica said that this raised the effective rate of tax on the South Morecambe field to 81 per cent.

"At this level of tax, profitability of Morecambe South field can be marginal and so we expect this field to operate on a more intermittent basis in future," a Centrica spokesperson said.

Industry bosses have also criticised the tax, describing it as short-sighted, while John Cridland, director-general of employers organisation the CBI, revealed he has written to the Chancellor asking him to reconsider the tax rise or grant exemption to well-established, more costly fields.

"The surprise nature of the tax increase has created fiscal uncertainty not only in the oil and gas sector, but across the energy infrastructure and supply chain. Companies have global opportunities for investment and I believe the tax, together with the restriction on decommissioning relief, will weaken investment in North Sea energy production," noted Mr Cridland.