Dave Winspear, managing director of Whitby's Alliance Fish, said the Government's limits mean fish caught accidentally will have to be thrown overboard and left to die as fisherman will not be allowed to land them.
The stark warning comes in the wake of year-on-year warnings that traditional North Sea fish stocks are seriously depleted.
And scientists from the International Council for the Exploration of the Seas have again said a complete ban on cod fishing is the only way to prevent the species dying out in the North Sea.
But conversely industry experts report an upturn in the numbers of fish being caught in the North Sea.
It overturns government warnings about low stocks, the basis of its clampdowns on fishing levels.
The East of England Fish Producers Organisation (EEFPO) says there has been a "phenomenal" increase in catches this year, particularly of fish such as cod, whiting and saithe.
Jim Linstead, chairman of the EEFPO, said cod in particular is thriving – and in numbers not seen for years.
Dave Winspear, of Alliance Fish, agrees and told the Gazette, "The evidence is there. These last couple of months, we've had a remarkably healthy showing of cod."
He had noticed that even fishing methods that do not target cod are finding them.
"Each vessel that's potting is catching cod."
But he said the encouraging upsurge would not benefit local fishermen as things stand.
"The UK cod quota, at the uptake levels that we've had, is projected to expire in about three weeks' time", he warned.
Even if cod is caught by accident, for example by boats trawling for prawns, that catch cannot be retained.
He said: "They will throw any cod back, dead, into the sea.
"They are not allowed to retain them on the boat – it's absolutely ridiculous. It's polluting the sea."
He is also concerned the situation is not being adequately monitored.
He said fishermen are not allowed to log details of their catches of cod – skewing figures that record fish stock levels.
"It makes all the data inaccurate when that kind of thing happens."
He welcomed the Fisheries Science Partnership which began two years ago where scientists have been going on board fishing vessels to gauge the health of fish communities.
These statistics will take time to evaluate and in the meantime he said "some common sense statistics" were needed.
The bumper catches have also included extra-large fish.
Jim Linstead of the FPO said: "Vessels targeting cod are reporting some of the largest cod ever caught – two individual fish per 50kg box were landed in Holland.
"It is not just a regional increase on the East Coast of England.
"Fishermen from the Thames to Shetland are reporting abundant codling, the Scots are reporting lots of very small haddock in the water and whiting is strong in the North Sea".
But the explosion in the fish population is not just confined to cod.
Whiting, which used to be a seasonal fishery, is now all year round.
According to the FPO, the heartening news is based on factual catch data and "first hand reports from fishermen with innumerable years of fishing experience."
Mr Linstead urged a rethink of government and EU policy, whereby quotas are in force which many fishermen find too stringent.
He also pointed out fish deaths are caused by factors other than fishing, such as seal and bird predation, and aggregate dredging.
"Fishermen are doing their utmost to help stocks survive.
"They just need to be given a fair chance to survive themselves".
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