A White House panel that investigated last year's oil spill in the Gulf of Mexico called Tuesday for the oil industry, Congress and the Obama administration to do more to reduce the chances of another large-scale disaster.

The independent panel, assembled by U.S. President Barack Obama, issued its final report recommending increased budgets and training for the federal agency that regulates offshore drilling and raising the liability cap for damages when companies drill offshore.

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BP contract workers clean up tar balls on a beach in Biloxi, Miss., after the BP oil disaster. ((Drew Tarter/Sun Herald/Associated Press))

It also proposed dedicating 80 per cent of fines and penalties from the BP spill to restoration of the Gulf and lending more weight to scientific opinions by other federal scientists in decisions about drilling.

The blowout and rig explosion last April that killed 11 workers and released more than 730 million litres of oil from the damaged well have prompted changes in the oil industry and at the agency in charge of offshore drilling.

"It is our government's responsibility that exploration and extraction occur in ways that are beneficial to the country," panel co-chair Bob Graham said.

"Drilling offshore is a privilege to be earned, not a right to be exercised by private corporations."

Graham said "the probability of another failure will be dramatically greater" if the recommendations are not carried out.

The panel said Congress should draft legislation to create within the Interior Department an independent safety agency and a separate environmental office to evaluate the risks of oil drilling to natural resources.

U.S. regulations for offshore drilling should be at least as stringent as those in other oil-producing countries and require oil companies to adopt safety procedures common elsewhere but lacking in the Gulf, it said.

Kendra Barkoff, a spokeswoman for Interior Secretary Ken Salazar, said in a statement Monday that the department already has "undertaken an aggressive overhaul" to increase safety and ensure responsible oil and gas development.

"We have made significant progress over the last eight months, but these reforms must continue," Barkoff said.

With files from The Associated Press