The booming industry has been blamed for causing a decline in wild fish stocks and for dumping vast quantities of sewage into coastal waters.

In response, Scotland's Deputy Environment Minister Allan Wilson yesterday outlined a blueprint to offer the £260m-a-year industry an environmental lifeline.

In the past 20 years, output from Scotland's salmon farms has risen from 4,000 tons to 127,000 tons of fish.

Friends of the Earth says the waste discharged from fish farms is equivalent to twice that from the country's human population.

The Executive's Strategic Framework for Aquaculture report published yesterday concluded that there was cause for concern.

"The siting of such farms in some cases may impact on wild Atlantic salmon and sea trout and thus indirectly also on freshwater mussels,'' it said.

"In several parts of the Highlands and Islands, wild stocks of salmon and sea trout are already severely depleted or even extinct.''

The influence of salmon farming was likely to be only one of several possible factors but it was important action was taken to minimise any effects of human activity on wild fish.

As farmed salmon production soared between 1983 and 1999, the wild salmon catch fell from 1,220 tons to less than 200 tons. There is growing evidence that the siting of farms near the mouths of salmon rivers passes disease and sea lice from caged fish to the Atlantic salmon.

Between 1998 and 2000, the number of escaped farmed salmon more than quadrupled from 95,000 to 440,000.

The Scottish Executive is to examine a number of "inappropriately located" farms and consider ways of having them repositioned, possibly with government financial assistance, by 2005.

The move was welcomed by Friends of the Earth Scotland, which wants a moratorium on the expansion of the industry.

"We have argued for many years that Scotland's fish farm industry was out of control,'' said Dr Dan Barlow, head of research for FoE.

The organisation has identified 18 areas which are adversely affected by fish farming. These include Scapa Flow in Orkney; Loch Roag and Loch Seaforth in Lewis and Loch Ewe, Loch Fyne and Loch Linnhe on the west coast.

"The failure of the executive to urgently bring in revised locational guidelines to get these fish farms moved from the mouths of salmon rivers and other sensitive areas means that sea lice will continue to decimate wild salmon and trout for at least another three years,'' said Robin Harper, a Green MSP, yesterday.

"Wild salmon are being driven to extinction in Scottish rivers and there is clear evidence pointing to fish farms. I have repeatedly called for assistance to be provided to fish farmers to enable the most poorly situated salmon farms to be moved immediately."

The Strategic Framework for Aquaculture was welcomed by Scottish Quality Salmon (SQS), the professional body representing the majority of fish farmers, as evidence that the Executive recognised the importance of the aquaculture industry to Scotland.

"Scottish aquaculture deserves this recognition so that it can build on its success to date and, with a proper strategic framework, deliver ever greater benefits to all interests through competitiveness, investments and sustainability," said Lord Lindsay, the chairman of SQS.