David Cameron has revealed that councils who host fracking sites will be offered millions of pounds in business rates.

Under the plans, councils who approve controversial fracking sites will be able to keep 100% of the business rates they collect from shale gas sites – double the current 50% figure.

Cameron said that the council incentives were part of government’s plan to “go all out for shale”, adding that the commitment could be worth around £1.7 million a year to a council for just one typical fracking site.

The government maintains that shale gas in the UK represents a significant economic opportunity, predicting that investment could reach £3.7 billion a year and support 74,000 jobs.

Announcing the new measures, Prime Minister David Cameron said: “A key part of our long-term economic plan to secure Britain's future is to back businesses with better infrastructure. That's why we're going all out for shale. It will mean more jobs and opportunities for people, and economic security for our country.”

In the chancellor’s Autumn Statement, George Osborne recently announced a tax break for the shale gas industry, cutting standard production income tax from 62% to 30%.

Commenting on the push for shale gas development in the UK, Friends of the Earth senior campaigner Jane Thomas said: “Fracking is not the solution to our energy problems – experts say it won’t lead to cheaper energy bills and the government admits shale gas and coal bed methane development could have significant impacts on local people and the environment.

“The best way to build an energy system that doesn’t cost the earth is to invest in a comprehensive energy efficiency programme and develop the UK’s huge renewable power potential.”

Writing in the Telegraph, Andrew Tyrie, chairman of the Tresury select committee, warned that offering incentives to councils in order to host fracking sites represented a “conflict of interest”.

The renewable industry is concerned that the government is unduly incentivising fracking developments; in July 2013, new planning guidelines were issued for solar and wind farms that called on local authorities to be mindful of the cumulative impact of solar and wind developments on landscape and amenity as well as a range of other issues – no such guidance has been issued for hydraulic fracking sites.