The future of beer production at one of Oxfordshire's oldest breweries is under threat.

Management at Henley-based Brakspear have been carrying out a review of the company's brewing operation.

The company said Chancellor Gordon Brown's decision to half the duty paid by small and micro-brewers -- the equivalent of 14p a pint -- will put Brakspear under greater pressure as the brewery is too large to qualify.

In the recent annual report, chairman Mike Foster pointed out that sales were declining, and that smaller, independent brewers were being put under increasing pressure by bigger operations.

He added: "The resultant pressure on profitability of our brewing operation is real and will continue unless there is a radical change in the structure of the UK beer market." A range of options are under discussion. But fears are rising that brewing at the site, which has operated on for 220 years, could end, or be contracted out to another company.

At the company's annual general meeting Mr Foster said it was becoming a matter of how and where the beer is brewed, not the quality and availability of the brands, to ensure long-term shareholder value is maintained.

Company spokesman Graham Stewart-Reed, said: "No decisions have been made. The Budget has added a new element to which way we go. Our competitive situation is becoming more difficult and we are being squeezed from the top and the bottom."

Brakespear chief executive Jim Burrows said: "New smaller microbreweries will soon have a tax funded substantial cost advantage to fuel a new price war for the vital free trade on which the survival of breweries, like Brakspear, depend."