Ministers should take "drastic" measures to prevent Britain's fishing stocks from being totally wiped out, senior peers have warned.

A report from the Lords European Union sub-committee on environmental and agricultural issues stressed the need for a sustainable policy for the beleaguered industry.

To compensate for the cutbacks in the UK fleets, the report also called for new measures to promote the diversification in coastal economies, developing alternative employment opportunities for fishermen.

There was also a warning that ministers should not attempt to block European Commission plans to reduce fishing quotas allocated through the Common Fisheries Policy.

"Stocks of North Sea cod and hake have been devastated by years of over-fishing, so the EU must take drastic measures to stop them being totally wiped out," said Lord Selborne, the chairman of the inquiry.

"A virtual ban on fishing cod will be a bitter but crucial pill for Scotland's fishing communities to swallow. Fisherman will need transitional financial aid, linked to stock recovery plans.

"We can only hope to create a sustainable fishing industry when short-sighted EU member states stop hi-jacking the Commission's excellent plans for long-term reform," he added.

The peers said that to "depoliticise" operational management of fisheries issues by devolving it to regional advisory councils where fishermen and other key players would have a central role.

And the UK government should press their European counterparts to adopt cod and hake recovery plans without delay and stop using EU funds to support new fishing vessel construction, added the report.