CHANCELLOR Gordon Brown is preparing to raise taxes on the North Sea oil industry in an attempt to raise funds for health and education without resorting to general taxation.

A Treasury consultation paper is due to be published within weeks, setting out options for skimming extra cash off the profits of the oil companies.

Mr Brown is said to be unconvinced by industry arguments that increased taxes could cost 50,000 jobs in the UK at a time when revenues are depressed by the record low levels in the price of a barrel of oil.

The Government is under fire for failing to meet its highly-

publicised pre-election pledges on education and NHS waiting lists.

Treasury sources said that Mr Brown does not accept the industry's claim that it cannot afford higher taxes, although it is understood that initial proposals have been watered down to be ''fair and reasonable''.

A source said: ''It simply isn't on for them to say they can't pay more. We will put out a document which will include different options, but it is clear they can afford to pay.''

The oil companies have lobbied desperately to block tax changes as part of the Government's review of the oil industry. Their campaign included personal appeals to Prime Minister Tony Blair.

Industry spokesmen claim 2000 jobs have already been lost through uncertainty over the likelihood of tax changes.

A consortium of six companies made up of BP, Chevron, Elf, Enterprise, Conoco, and Amerada Hess said they have shelved plans to develop the huge Clair oilfield, west of Shetland.

The field, the biggest yet discovered in the Atlantic, has 300 million barrels of recoverable oil, but the companies say uncertainty over the tax regime on their investment capital means the project cannot go ahead.

Mr Brown's aides said that he wants to preserve the long-term future of Scottish oil jobs, but that he was not prepared to be bounced out of a decision concerning a sensible tax change.

The consultative document being prepared by the Treasury has studied the oil tax regime in other countries to determine whether companies operating in British waters make higher profits from oil exploration than elsewhere.

The preferred option, which would not hit the companies during periods of reduced revenues, would be a change in the Corporation Tax structure. The Treasury is also said to favour allowing companies to offset exploration costs against tax in order to maintain the incentive for investment.

The price of a barrel of oil remains struck at around $14, scarcely different from the price before the 1974 oil shock.

SNP energy spokesman Alex Neil condemned the decision: ''Instead of taking even more money out of Scotland's hard- pressed oil industry, Gordon Brown should release some of this cash that he is hoarding for a pre-election bonanza in 'middle England' from his Treasury war-

chest.''