The Energy and Climate Change Committee rejected a moratorium after investigating the risks, The Daily Telegraph reported.
Oil companies admit current plans for drilling off Scotland's Shetland Islands could cause a spill worse than the Gulf of Mexico disaster.
But Member of Parliament Tim Yeo, chairman of the committee, said Britain's energy and national security rely on exploiting the newly discovered oilfields. He said safety rules could be "tightened up," but calls the general regulatory system "robust."
"I think the concerns are nothing like big enough to justify stopping the process," he said.
A quarter of the United Kingdom's known oil and gas reserves, about 4 billion barrels, lie in deep water off the West of Shetland. Only four fields are currently in production, but the government has granted more than 100 exploration licenses with more pending.
Ben Ayliffe of Greenpeace cited a doubling of serious accidents and a rise in spilled oil at rigs operating off the U.K. coast.
The Marine Conservation Society calls for a moratorium on drilling in the area because of the risk to wildlife and fisheries.