Drilling for shale reserves could create 35,000 jobs in the UK and provide a tenth of the country’s gas supply for a century, claims the Institute of Directors (IoD).

The Government is expected to give the green light for more fracking in the UK to access shale reserves within weeks as it publishes a new gas strategy, but energy secretary Ed Davey warned yesterday that it was no “silver bullet”.

The IoD has released a new report on the process this morning which claims there will be an upward revision in the estimate of the size of the UK’s shale gas reserves later this year, up from 5.3 trillion cubic feet. It also suggests there would be “environmental benefits” to using shale gas over coal-fired power plants.

Until 2004 the UK was a net exporter of gas, but North Sea supplies have dwindled in recent years. Without new domestic resources, Britain’s natural gas import costs could rise from $8.5bn (£5.2bn) today to more than $11bn by 2015 as North Sea supplies dwindle and Norway struggles to fill the gap, Reuters research showed this week.

The IoD report said: “Shale gas development can counter falling North Sea production, halting the increase in gas imports. It can also help to reduce price rises for consumers.”

“Shale gas development does not magically solve all the UK’s energy issues. North Sea production will still fall, the renewables programme will still increase energy prices for industry, and coal and nuclear will still decline in capacity.

“A mix of power sources is vital, and domestic shale gas is unlikely to account for a majority of the UK’s electricity generation, or even of its gas usage. But it could and should play an important role.”

The business group conducted a survey which revealed that 58pc of its members thought that fracking would be “positive” for the UK, while only 7pc thought it would have a “negative” effect.

However, there are concerns over pollution and minor earthquakes caused by fracking, which involves pumping water and dissolved nitrogen into the ground at high pressure. Shadow energy minister Tom Greatrex has called for a “strong regulatory framework” to minimise these dangers. Bulgaria and France have both banned the process.

Dan Lewis, chief energy adviser to the IoD, told the Financial Times: “We have a massive reserve of shale gas sitting right beneath our feet and we must take advantage of it… we cannot afford to pass up this opportunity”.