First Minister Alex Salmond has welcomed the decision of oil giant BP to invest over £4bn in the Clair field west of Shetland. The move brings BP’s investment in the UK to £7.7bn in 2011, its highest ever annual commitment to its domestic market.

But the announcement comes just days after a leaked BP safety report, heavily criticised by environment groups, showed the company’s worst-case scenario could precipitate a spill in UK waters greater than the Deepwater Horizon disaster of 2010.

The investment, which reaches £4.5bn when the contributions of partners Chevron, Conoco Phillips and Royal Dutch Shell are taken into account, will provide a significant boost to the North Sea oil industry. BP said the new UK output would enable it to sustain a daily output of 200,000-250,000 barrels of oil equivalent until 2030.

Oil analysts say the company may be looking to strengthen its share in the UK market after major international projects, most notably in the Russian Arctic, have hit the buffers since the Deepwater Horizon spill.

“This massive new investment by BP and its partners is extremely welcome, and confirms that the offshore industry has a key role to play in generating jobs, skills and revenue for decades to come,” said Salmond.

He said the investment proves “there is plenty of life left in the industry,” and challenged Prime Minister David Cameron to provide a substantive reply to the Scottish Government criticism of the hike in the Supplementary Charge (SC) which many analysts say has destabilised investor confidence.

The Scottish Government has proposed the UK Treasury adopt a “more progressive” taxation model devised by the oil economist Professor Alex Kemp, which it says would “incentivise investment in more challenging and mature fields”.

However, the First Minister’s endorsement will not sit well with environment groups, who argue that the leaked BP document shows the danger of the company’s plans to drill in hostile waters off the west coast of Shetland. The document revealed a worst-case scenario could involve 75,000 barrels of oil day spilling into the sea for 140 days – a total of 10.5 million barrels of oil, more than double the size of the Deepwater Horizon leak. The RSPB, WWF, Greenpeace and Friends of the Earth have written a joint letter to the Energy Secretary, Chris Huhne, urging him to refuse consent for the oil giant’s proposed North Uist well and censuring the company over its lack of transparency. Last week BP’s public consultation exercise about the well ended without a single response from the public.