The only fracking licences for gas extraction in Scotland are going to be dropped, according to the firm that holds them.

Australian-owned Dart Energy is in discussions with the Scottish Environment Protection Agency (Sepa) over ending its permits for two sites near Canonbie in Dumfries and Galloway.

That would mean that, in contrast to England, no hydraulic fracturing to extract underground shale gas would be allowed in Scotland. Huge shale reserves were identified across northern England last week by the British Geological Survey, with strong backing from the Westminster government.

Abandoning fracking in Scotland could help pave the way politically for Dart's controversial plans to exploit coal-bed methane using other techniques at Airth, near Falkirk, and at Canonbie, where the company is working with the Duke of Buccleuch's estate.

Dart said it had shown that commercially viable levels of coal-bed methane could be extracted in Scotland without recourse to fracking technology. The company has been assessing the fracking licences it acquired from another company at Canonbie in 2012.

"We are working with Sepa to alter our permits such that we do not need nor have licences to use fracking for coalbed methane," a Dart spokesman told the Sunday Herald.

Sepa confirmed that "informal discussions" had taken place with Dart regarding the Canonbie licences, but no formal applications had been received. It has also disclosed that an investigation into an allegation of methane leaks at Canonbie has uncovered no evidence of problems. The investigation was prompted by an allegation received by the Sunday Herald in April.

Mary Church, campaigns co-ordinator at Friends Of The Earth Scotland, welcomed Dart's plan not to use its fracking licences, but added: "Coal-bed methane extraction is bad news for the climate and local communities whether or not fracking is used. We are calling on the Government to ban all unconventional gas extraction."

The Scottish Government pointed out that there were "no plans or projects which propose the use of fracking techniques in Scotland at this time."

A spokeswoman said: "Proposals for coal-bed methane or shale gas production in Scotland will be studied on their merits. Each proposal will be considered through the normal planning process and the appropriate regulatory regimes."