The prospect of a controversial technique to extract shale gas being used in Scotland took a big step forward yesterday despite an outcry from environmental campaigners.

The UK Government has announced it is lifting its temporary ban on fracking, blamed last year for triggering earthquakes near Blackpool.

Campaigners have warned consumers and the environment would pay the price for ministers pinning their hopes on an "unsubstantiated, polluting fuel" and predicted the move would send shock waves across the UK.

But advocates of shale gas exploration argued the energy source could help household gas prices fall and keep the lights on across the country.

Fracking is controversial because it involves hydraulic fracturing – which uses high-pressure liquid to split rock and extract gas.

The ban was lifted as UK Energy Secretary Ed Davey said the latest scientific research showed shale gas was a promising potential energy source which could help the UK reduce its reliance on imported gas.

The Treasury has already indicated its backing for shale gas exploration, proposing a system of tax relief.

The Scottish Government appeared to give the announcement a cautious welcome, saying unconventional gas sources could secure energy supplies.

Scottish-based The Weir Group said shale could contribute to the use of gas as a "cleaner transition fossil fuel".

Friends of the Earth warned huge swathes of Scotland could be designated as potential sites of exploration under the plans.

Oil and gas policy are reserved to Westminster but Scottish local authorities would be involved in decisions on specific fracking applications.

The Scottish Environment Protection Agency (Sepa) would also have to be convinced any development could properly mitigate its environmental impact.

Australian company Dart Energy has two licences from Sepa for boreholes and the introduction of fracking fluids at a site near Canonbie, Dumfries and Galloway, but the project has yet to be pursued.

As a result of Dart's large scale work at Airth, near Falkirk, an application to sink 22 new wells for coal bed methane extraction has been lodged with the local authority, despite growing community objections.

Dart insists no fracking will be carried out on the site. But Friends of the Earth Scotland claimed fracking could be introduced at coal bed methane sites without the need for further regulatory controls.

Sepa will issue licences relating to water protection, but these do not have to go through any process of public consultation.

Mary Church, a Friends of the Earth campaigner, said: "Under the regulatory framework, fracking could be introduced at coal bed methane developments without the involvement or even awareness of local authorities and communities."

A spokesman for Sepa said: "Fracking can be used to facilitate the extraction of coal bed methane, however the operator said it has no intention to undertake hydraulic fracturing, or fracking, at this site."

Last night a Scottish Government spokeswoman said: "In Scotland we need a diverse energy portfolio to aid resilience and maintain security of our supply.

"It is essential, however, that exploration and production of natural gas is done safely and responsibly, with due regard to the environment. New guidance has been produced by Sepa to cover its regulatory roles in relation to coal bed methane and shale gas."