A huge swathe of Hampshire could hold mass reserves of shale gas it was revealed today.
It comes as the it was announced that communities affected by controversial ``fracking'' will be offered an average of £800,000 in additional compensation in an effort to stave off opposition in Conservative heartlands, according to reports.
Prime Minister David Cameron, an avid supporter of hydraulic fracturing for shale gas, will make the announcement as a survey is published showing the extent of shale gas reserves in the south of England, it has been reported.
The Government will hope the extra money quells criticism of plans to reform trespass laws to allow the fracking industry to grow to give Britain an alternative source of energy.
The compensation will be offered alongside one-off £100,000 payments in areas with fracking sites and a 1% share of profits made.
The announcement will come as the British Geological Survey (BGS) publishes a long-awaited study into the extent of shale gas reserves in the south of England.
According to the Times it is expected to show reserves in Kent, Sussex, Surrey and Hampshire, all areas where the Conservatives enjoy support.
Ministers firmly back the exploitation of shale gas reserves in rocks beneath the UK, claiming it could bring down energy bills and create thousands of jobs.
Environmental activists are bitterly opposed to the technique, which opponents say can increase climate change, cause small earthquakes and pollute water supplies.
The Prime Minsiter has insisted fracking will be ``good for our country'' and has blamed a ``lack of understanding'' of the process for some of the opposition.
Mr Cameron's Tory colleague Lord Howell, Chancellor George Osborne's father-in-law, has caused controversy by calling for fracking to be carried out in the ``desolate North''.
The BGS has already found large reserves of shale gas in the North but has now completed a months-long survey of the extent of it in the South.
Green Party MP Caroline Lucas said fracking would not bring down energy bills as the gas or oil exploited would be sold on European markets and not used in the UK.
She said: ``Even the boss of (fracking firm) Cuadrilla has said fracking in Britain wouldn't reduce energy prices.
``Lord Stern has called it baseless economics and that's because here in the UK if we frack in the UK we don't actually use that gas or oil in the UK, it gets sold on European markets at the going price.
``That's very different from the (United) States where because it's a much bigger country and they are less locked into those bigger world markets they use their own gas and oil as they frack.
``Even the experts, even the people who are in the forefront of the fracking ideology are saying actually that it's not going to lead to lower prices so if you want lower prices you need to go down the renewable route.''
Andrew Austin, of IGas Energy, said his company already exploited oil and gas reserves in the south of England.
He said: ``We've known that there's a big potential for oil and gas exploration across the country but particularly in terms of oil in the Weald basin which is the area that stretches roughly from Winchester across towards Gatwick up to the M25 and down to the coast at Chichester.
``There's been a long history of oil and gas exploration in this area. we as a company produce oil and gas from around 20 sites across that area, around 40 million barrels have been recovered to date across that area.''
Friends of the Earth's South East regional campaigner Brenda Pollack questioned the timing of the announcement, coming after the local and European elections.
She said: ``These latest estimates will set alarm bells ringing across the south east of England where fracking firms seem intent on punching holes in some of Britain's most beautiful countryside in the search for profits.
``No wonder the Government waited until after the elections to make this announcement as Lord Howell recently warned that fracking will cost the Tories thousands of votes in their heartlands.
``Shale oil and gas are not the solution to the UK's energy challenges. Rather than drilling for more dirty fossil fuels that will add to climate change, the Government should be backing renewable power and energy efficiency.''