Companies fracking for shale gas in the UK should be made to offer substantial financial incentives to people living near their sites, an influential committee of MPs has said.

The energy and climate change committee said on Friday that measures such as cash payments or rebates on energy bills would be needed to overcome local opposition to shale gas drilling, which has been associated with water, ground and air pollution in the US, and which green groups say is incompatible with moving to a low-carbon energy supply.

But the MPs also warned that even if fracking does take place on a large scale in the UK, there is no guarantee that it will lower energy bills.

Tim Yeo, chairman of the committee, said: "We believe the UK's shale resources should be exploited, but that looks difficult given local opposition to drilling. There has to be a way of getting to communities."  MORE