Scottish scientists have been given the go-ahead to study the impact huge oil and gas developments will have on the rare coral reefs off Shetland.

The study is part of a £2.2 million programme, jointly funded by research councils, the Government and the oil industry, aimed at assessing and minimising the risk posed to marine life by drilling in the area.

Scientists from the Natural Environment Research Council and the Engineering and Physical Sciences Research Council will concentrate on the Atlantic Frontier oil and gas province, which stretches from 100 miles west of Shetland down to Rockall.

Yesterday, the environmental group, Greenpeace, criticised the three-year research project as being "too little too late" since it claims oil exploration and production is likely to continue regardless of the findings and the study.

The area is the focus of oil exploration and development after the granting of new drilling licences and is thought to be a huge field.

The coral formation in such deep waters off the north-west coast has been hailed as "very important" by the scientist spearheading the study, Professor John Gage, of the Scottish Association for Marine Science. "This is very exciting as it is very unusual to find coral in deep, dark waters. This formation might be very, very ancient and could harbour up to 800 species he said.

Prof Gage said it was likely the mounds represented the relics of one large coral reef which had been fragmented by changes in sea level over time.

Stretching hundreds of miles and reaching 2,500ft below the surface, the group of about 100 coral mounds is believed to be up to 8,000 years old.

Although the existence of coral in the area has been known for some time, its extent was only recently discovered.

The three-year study will map the reef, study its biodiversity and measure its susceptibility to damage and pollution, which threaten its future. Dr Jonathan Williams, programme manager for the Managing Impacts on the Marine Environment study, promised an open and "truly collaborative approach" between all those involved in the study and free access to the findings.

Today, Greenpeace will host a conference in London highlighting the threat posed to marine life by oil and gas exploration.

The Greenpeace campaign director, Sarah Burton, said: "Although such research is important, it is nonsense to study the effects of the oil industry without including its end result.

"By the time the survey results are available, tens of oil wells could have been sunk in the Atlantic Frontier and untold damage will have been done."

Ms Burton said Greenpeace was ready to go to court if the Government refused a full environmental impact assessment, as required under European law.

The three-year study will also involve Heriot-Watt University in Edinburgh in a project to develop more sensitive chemical contamination monitoring techniques and the Dunstaffnage Marine Laboratory in Oban in the importance of clearing material deposited after drilling.

Prof Gage said oil firms involved in the project would modify their plans to take account of the scientists' findings. But he said deep water fishing was likely to pose an even greater threat to the coral than oil exploration.

"With powerful gear large trawlers could do a lot of damage to corals on the sea bed and these reefs will certainly be affected. Marks made by trawlers, even non deliberate, can already be seen.

"It is perfectly possible that fishing at present might cause more damage than oil and gas drilling."

As well as the three-year study, shipbrokers in Aberdeen are to spend £60,000 chartering a vessel to spend 30 days in the wilderness over two expeditions this winter.

The boat will carry ornithologists on a census of seabirds in the wild seas of the West Shetland oilfields, filling in the gaps in an environmental assessment published by the oil industry last year.

Meanwhile, another environmental group, the Marine Conservation Society today accuses the Department of Trade and Industry of colluding with the UK oil industry to conceal damage being done to the marine environment by oil rigs by withholding information from them.

The society says that DTI information to which it has managed to gain access shows the number of spills reported by the industry more than doubled to 300 from 1995 to 1996, while the tonnage of oil spilt from UK oil rigs increased by half.