UK water companies have warned shale gas 'fracking' should not be allowed to compromise public health as the Chancellor unveiled plans for a "generous" tax relief regime for the industry.
Water UK policy and business adviser Dr Jim Marshall said public health should not be put at risk by attempts to cash in on the controversial energy resource.
"Provision of drinking water is a cornerstone of our public health and as such a service that cannot be compromised," he said.
"There are arguments for and against fracking and the water industry is not taking sides. If it goes ahead, we want to ensure corners are not cut and standards compromised, leaving us all counting the cost for years to come.
"We want greater clarity from the shale gas industry on what its needs related to water are really going to be and a true assessment of the impacts."
George Osborne's planned new shale gas allowance will more than halve the tax due on a proportion - which will be determined following consultation - of income from production in order to encourage exploration of the unconventional energy resource in the UK.
Supporters say fracking will reduce the UK's reliance on energy imports The backing from the Treasury comes after a recent report from the British Geological Survey revealed there was twice as much shale gas in the north of England as previously thought. Other areas of the country could also be exploited for the gas.
Ministers believe the experience of the US, which has seen a shale gas boom, shows it could boost tax revenues, create jobs, reduce energy imports - which have reached record highs in the UK - and bring down household fuel bills.
George Osborne said: "Shale gas is a resource with huge potential to broaden the UK's energy mix. We want to create the right conditions for industry to explore and unlock that potential in a way that allows communities to share in the benefits.
"This new tax regime, which I want to make the most generous for shale in the world, will contribute to that. I want Britain to be a leader of the shale gas revolution - because it has the potential to create thousands of jobs and keep energy bills low for millions of people."
But opponents warn that the process for extracting shale gas, by fracturing rock with high-pressure liquid to release the gas, or "fracking", can cause earthquakes, pollute water supplies, blight the countryside and affect house prices.
Questions have also been raised about how much of an impact efforts to develop home-grown shale resources will have on household energy bills, and environmental campaigners warn a new "dash for gas" will undermine efforts to develop clean energy, cut emissions and create green jobs and growth.
Environmentalists warn against 'industrialising' the countryside Greenpeace energy campaigner Lawrence Carter said: "The Chancellor is telling anyone who will listen that UK shale gas is set to be an economic miracle, yet he's had to offer the industry sweetheart tax deals just to reassure them that fracking would be profitable.
"Experts from energy regulator Ofgem to Deutsche Bank and the company in receipt of this tax break, Cuadrilla, admit that it won't reduce energy prices for consumers.
"Instead we're likely to see the industrialisation of tracts of the British countryside, gas flaring in the Home Counties and a steady stream of trucks carrying contaminated water down rural lanes."
New planning guidance on shale gas is set to be published by the Communities Department as the Government attempts to drive forward exploration.
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