Oil and gas producers could be driven out of investing in British waters if Chancellor Jeremy Hunt raises the windfall tax to 35%.
That was warning at the weekend from trade body Offshore Energies UK (OEUK).
It said its members have been shocked by reports of the proposed "supertax".
Britain's offshore operators were already paying a tax rate of 40% - the highest of any industrial sector - on profits from oil and gas production, before the additional 25% levy was imposed earlier this year.
This means they are now paying a 65% tax rate.
OEUK says that, if the UK Government added another 10% to the levy it would push the overall tax level to 75% - a rate so high that many oil and gas producers would have to reconsider investment plans worth billions of pounds.
Fiscal stability essential
The trade body has told Mr Hunt that its members are proud to pay their taxes, but long-term fiscal stability and intelligent taxation were essential to the future of an industry that plans and invests over years and decades.
It has also warned that a reduction in investment would soon translate directly into reduced UK production of gas and oil - damaging jobs, undermining the UK's energy security and driving up imports.
Long-term, it would also risk undermining tax income, because the chancellor can only tax the profits on oil and gas produced in UK waters.
He cannot tax profits earned on overseas production - even for companies based in Britain. This means that if UK production of oil and gas declines, then Britain's tax take will fall too.
An OEUK spokesperson said about the reports of a 35% levy: "We're completely taken aback by this, coming just days before the chancellor gives his fiscal statement.
"Our industry plays a critical role in providing reliable and responsible supplies of energy to the UK - with all the benefits that brings in generating taxes, secure energy and jobs.
Sudden extra taxes
"Imposing sudden extra taxes will make it even harder for these companies to invest in UK energy production - both the gas and oil we need today, and the wind, hydrogen and other low-carbon energies we need to reach net-zero by 2050.
"Driving investment out of UK waters into other countries will increase reliance on imported energy, reduce the tax flow to the Exchequer, and make it even harder to increase our domestic production of lower-carbon energies.
"We need a diverse range of offshore operator and supply-chain companies with the skills and people to build the low-carbon energy future we all want to see.
"It deeply concerns us that that the complexity of the UK offshore energy sector is not being considered when we are on the cusp of such an important transition."
This Thursday's Budget is likely to be toughest seen in many years.
North Sea oil and gas producers are puzzled as to why the UK Government is continuing to target the sector with ever-higher cash demands while the country's banking sector continues to escape scot-free.
It appears there are no plans for a levy on the bumper profits of bankers benefiting from rises in the interest rate.