In their heyday, the corals along the shores of the Israeli Red Sea resort of Eilat were a hot spot for divers drawn by one of the most spectacular and biologically diverse reefs in the world.

Today Eilat's corals are facing extinction and the colorful translucent fish are disappearing because of what environmentalists say is a lucrative fish-farm industry in the region's waters.

"It was one of the most beautiful reefs in the world and believe me I've seen them all. It was a pearl and it's really very painful to see it dying," said Professor Yossi Loya, an internationally renowned coral ecologist.

He and other experts say Eilat's reefs will soon be wiped out unless the government swiftly closes companies that breed some five million fish a year in cages and are operating without permits.

"We are in the 11th hour, the very last moment to save them," said Loya, who has studied Eilat's reefs for decades.

The fish firms deny any direct link with the coral decline.

The reefs had sustained damage for years as Eilat and the neighboring Jordanian Red Sea resort of Aqaba grew from isolated desert outposts into tourist boom towns.

Loya and other experts say the most severe damage began in 1993 after fish companies started mass production.

At the time, the reefs should have regenerated as a sewage plant began to treat Eilat's waste. Instead, coral degradation accelerated and new coral growth dropped to near zero.

"What happened between 1993 and 2000 is there was an exponential increase in the yield of fish cages from 300 tons per year to something like 2,000 tons per year," Loya said.

These fish excrete nitrates that develop plankton, the enemy of corals as they make the sea water murky and block sunlight which is an essential ingredient for coral survival.

"The key point is that the Gulf of Eilat is an oligotrophic sea, a sea that does not have nitrogen at all," Loya explained.

"Coral reefs thrive in seas that are poor in nitrogen. If you increase nitrogen you are changing the environment and in such a sensitive environment like coral reefs it is mainly affecting the reproductive system of corals."