The Cambo project had become a lightning rod for campaigners calling for an end to new fossil fuel projects due to concerns over climate change. 

Nicola Sturgeon, Scotland’s first minister, had said it should not be allowed to go ahead, with the UK Government put under growing pressure to block the project. 

Shell is believed to have been frustrated about the lack of political support, while legal challenges from campaigners were also likely. 

Siccar’s latest statement will dampen hopes among the oil and gas industry that it will find another partner to bring forward the field, which was expected to produce about 170m barrels of oil over 25 years and create around 1,000 jobs. 

But it will also fuel questions about whether ministers are doing enough to protect jobs and domestic energy supplies during the shift to cleaner energy. 

Sir Ian Wood, the Scottish industrialist, has urged politicians “reflect carefully on their public statements on oil and gas and the impact they have on investment in the industry.”

More than 75pc of the country’s energy still comes from oil and gas and the rate at which this will decline will depend on the success of rolling out electric cars, heat pumps, wind farms and other low carbon energy sources. 

The Government broadly supports the oil and gas industry but is also pushing it to develop hydrogen and carbon-capture systems which can help deliver cleaner energy.