KPMG has found that the number of deals completed in the first half of this year was down 51% on the same period last year. The previous year showed a fall of 44%.

The results make gloomy reading for those who had hoped the appetite for corporate transactions would remain relatively strong despite gloomy financial conditions.

Craig Anderson, head of KPMG in Scotland, said: "While some had hoped that Scotland could perhaps weather the storm better than the rest of the UK, it seems we cannot hide. There is a definite downward trend in deal activity."

He said the deals climate began to get tougher in the second half of 2007 as the markets tightened up, and despite many businesses rushing to complete deals ahead of the April 6 deadline for Business Asset Taper Relief.

"A lack of available funding from the banks, together with a fall in consumer confidence and a slump in the property sector, has severely affected appetite in the deals market," said Anderson.

There were 533 deals in the first half of 2006, falling to 264 a year later and 148 this year. The average value of deals in 2006 rose from £19.3m to £29.4m in 2007 but fell back to £10.2m this year.

Aberdeen continues to buck the trend due to continuing strong activity in the oil and gas sector.

The few notable deals include Clyde Blowers' $1bn (£571m) acquisition of a division of Textron.

The average value of deals has also taken a hit. In the first half of 2008, the average Scottish deal value was £10m, a drop of almost two-thirds compared with the first six months of last year, when the average corporate transaction was valued at £29m. Anderson said: "Unfortunately, vendors' price expectations haven't readjusted in line with current market conditions and it seems they would rather hold onto their business for the time being, rather than sell at what they see as a discounted price.

"Those in the Scottish dealmaker community will already be preparing for a cold winter. I don't see 2009 offering much in the way of respite."