ONE of Scotland's most successful businessmen is to spend £25 million trying to save the fortunes of Aberdeen and the north east as the oil industry declines.

Sir Ian Wood, whose family made a multi-million pound fortune from the offshore oil and gas industry, is launching a new private sector-led body Opportunity North East (ONE), to help carve out a sustainable future for the region.

It should have at least £50m to spend on job creating projects over the next five years. It will act almost like a private sector development agency working with existing public sector bodies such as Scottish Enterprise.

Sir Ian said ONE would be the Wood Foundation's "principal project" in the north east, with backing of £5m a year for the next five years. It is hoped that this will be matched by other private and public funding sources.

Sir Ian said: "Significant under investment in infrastructure, both physical and digital, a high cost of living and an economy dominated by oil and gas have combined to present us with a major challenge.

"The current downturn in oil and gas has cast the issues we face into even sharper relief and there are essentially two routes ahead. A renaissance which sees us revitalise the region’s economy or a slow decline towards becoming a museum for the golden age of North Sea oil and gas.”

Sir Ian, who is retired, leads the philanthropic work of the Wood Foundation, both in Scotland and in the Third World.

He had previously proposed spending £50m supporting the transformation of Union Terrace Gardens in Aberdeen, from a sunken Victorian park to a new raised civic space. But the scheme was abandoned in 2012.

Now ONE will be the private sector partners of Aberdeen City and Aberdeenshire councils in their bid to win a City Region Deal from UK and Scottish ministers. This could herald around £2.9 billion for infrastructure improvements over the next 20 years.

Sir Ian said it could be a real game-changer, improving sea and air links; Aberdeen city centre; leisure and recreational facilities; the digital and physical infrastructure. Another proposal is an Oil & Gas Technology Centre in Aberdeen.

It came as MSPs were warned of further "inevitable" job losses in the North Sea. Mike Tholen, economics director at industry body Oil and Gas UK, said firms operating in the UK continental shelf are under "such big duress from the fall in oil prices".

He told MSPs on Holyrood's Economy, Energy and Tourism Committee: "Inevitably there will be further job losses, not least because the outlook remains much lower than anticipated even in the spring of this year."

Speaking about ONE's potential contribution, Sir Ian said: “Right now we are called the oil capital of Europe but we really are the oil operations capital. We are not the oil technology, research and development capital of Europe. That’s the balance we want to achieve.”

He said the centre would involve Aberdeen and Robert Gordon universities and would focus on technologies maximising recovery from mature oil fields, along with their decommissioning. “But it will be totally market driven and orientated," he said.

The search is now on for a headquarters in Aberdeen for ONE with up to 10 full-time staff. Jennifer Craw, chairwoman of the board of governors of Robert Gordon University and a former chief executive of Scottish Enterprise Grampian, has already been appointed as ONE's chief executive.

ONE will work through four key sector boards covering Oil & Gas; Food, Drink & Agriculture; Life Sciences; and Tourism, under a main board.

Patrick Machray will chair ONE Food, Drink & Agriculture. He is chairman of ANM Group, one of the UK’s largest farming cooperatives, and of Scotland’s Rural College.

Professor Stephen Logan will chair ONE Life Sciences. The first professor of neuroscience at Aberdeen University be became dean of the medical school and senior vice-principal of the university. He is now chairman of NHS Grampian.

In tourism, ONE will work with the board of VisitAberdeen, the destination marketing organisation chaired by Colin Crosby.