By Tomas Sarmiento

SAN FELIPE, Mexico (Reuters) - The vaquita, a tiny stubby-nosed porpoise found only in Mexico's Sea of Cortez, is on the brink of extinction as more die each year in fishing nets than are being born, biologists say.

A drop in vaquita numbers to as few as 150 from around 600 at the start of the decade could see the famously shy animal go the same way as the Chinese river dolphin, which was declared all but extinct in 2006.

"The urgency now is to prevent the vaquita becoming extinct," Omar Vidal, the WWF conservation group's director in Mexico, told Reuters in San Felipe, a fishing town in the upper Gulf of California, or Sea of Cortez, where the vaquitas live.

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"The latest studies suggest that we have perhaps one or two years for that," said Vidal, one of a team that has been battling to preserve the species for over 10 years.

The world's smallest porpoise, growing to a maximum of 5 feet long and gray in color, vaquitas are so timid that they are hardly ever sighted.

They shun the showy acrobatics of other porpoises, and when they come up for air they poke their odd-looking faces, with their black-circled eyes and beak, above the surface for just a second or two before diving quietly back below.

Identified only 50 years ago when some skulls were found, vaquitas are tracked using underwater microphones to pick up the high frequency clicks they use to communicate.

TANGLED IN FISHING NETS

The drop in numbers suggests they are getting tangled in fishing nets at a faster rate than they can reproduce.

Female vaquitas only produce young once every two years and the genetic pool is now too small for effective breeding.

Meanwhile mesh gillnets used to catch sea bass, mackerel, shrimp and sharks also trap and drown air-breathing vaquitas, whose name is Spanish for "little cow."

The government is trying to persuade some fishermen to ditch their nets and start conservation-based tourism businesses, like boat trips to see marine life.

But one person in four in the area lives off fishing and few want to give up a trade where a small fishing boat can haul in 441 pounds (200 kg) of blue shrimp, worth thousands of dollars to the export market, in a single day.

"We've been fishermen all our lives. It's what we do," said Tomas Ceballos, 51, talking over the top of a government official trying to promote a scheme of financial incentives to start tourism projects.

Conservationists are also trying to get fishermen to switch to new nets that are less likely to trap vaquita.

Jose Campoy, head of a marine reserve set up in 1993 to protect endangered species in the area, said one vaquita death a year in nets was too many for the struggling species.

Environment Minister Juan Elvira Quesada said the government would spend $10 million this year on protecting the vaquita. "Every day that goes by is a lost day," he said.

(Writing by Catherine Bremer, editing by Sandra Maler)