BOLTON Council could receive a cash windfall if it allows companies to drill for shale gas in the town, following a Downing Street announcement.

But the council leader has stressed no sites have been identified in the town yet.

Prime Minister David Cameron said yesterday local authorities that allow fracking — a process of drilling into the ground to recover gas and oil — will be able to keep 100 per cent of the business rates they collect from the site.

The amount is double the current 50 per cent figure, and could be worth up to £1.7 million a year for a typical site.

However, the practice is highly controversial, with green campaigners arguing the process uses huge amounts of water and potentially carcinogenic chemicals, which could escape and contaminate ground water, and fracking can also cause small earthquakes.

Cllr Cliff Morris, Bolton Council leader, refused to be drawn on the benefits or negatives on fracking.

He said: “On fracking, everyone will be judged on its merits, where it is and what the impact will be.

“There are no sites identified in Bolton at the moment.”

In recent weeks, hundreds of environmentalists have been camping at Barton Moss, in Salford, to protest against plans for exploratory drilling at the site, about 12 miles from Bolton.

Energy company IGas has permission to carry out test drilling on the area, which campaigners say could lead to the discovery of shale gas.

During the announcement, Mr Cameron said local communities would also benefit from shale gas exploration, with local areas receiving £100,000 when a test well is fracked — and a further one per cent of revenues if shale gas is discovered.

He said: “A key part of our long-term economic plan to secure Britain’s future is to back businesses with better infrastructure.

“That’s why we’re going all out for shale. It will mean more jobs and opportunities for people, and economic security for our country.”