Homeowners near sites where shale gas exploration is taking place will be able to cash in under new government proposals.
Residents close to fracking sites could benefit directly from a share of as much as £1bn, new Prime Minister Theresa May has said.
The shale wealth fund, set up under George Osborne, promises up to 10 per cent of tax proceeds from fracking will go to local communities. Now, that cash could go directly to locals instead of councils and other organisations.
Households could be in for a payout of as much as £10,000 each as May promised ordinary families would benefit.
"The government I lead will always be driven by the interests of the many – ordinary families for whom life is harder than many people in politics realise. As I said on my first night as Prime Minister: when we take the big calls, we'll think not of the powerful but of you," said May.
"This announcement is an example of putting those principles into action. It's about making sure people personally benefit from economic decisions that are taken – not just councils – and putting them back in control over their lives."
Fracking has been a controversial issue and has faced opposition from local communities, however, the government and business have welcomed the new industry as part of the UK's energy policy.
Third Energy was given the go-ahead in May to begin fracking in North Yorkshire by local councillors – the first to be approved since a 2012 ban on the practice. Plenty more exploration is in the pipeline, with hundreds of new licenses granted in the past year.
A consultation on the new proposals will begin this week, but the payments were labelled "little more than bribes" by the Green Party.
"This is bound to set household against household and can only exacerbate community tensions," said Green Party MEP Molly Scott Cato.
"Following hard on the heels of the Hinkley fiasco, this misguided policy to encourage fracking demonstrates again that the government has no strategic energy policy."
Ken Cronin, chief executive of UK Onshore Oil & Gas (UKOOG), the industry trade body, said: “The onshore oil and gas industry in the UK continues to believe that local people should share in the success of our industry and be rewarded for hosting sites on behalf of others in the country. That is why we launched the industry’s community benefits scheme and community engagement charter in 2013. These are additional to the proposed Shale Wealth Fund.
“The overarching objectives of secure, affordable and low carbon energy continue to be a driving force for our industry. Just 12 years ago, Britain was a net exporter of gas, but imports now make up nearly half of our gas demand, at a cost to this country of around £10m a day. Recent estimates by National Grid are that, without shale, the UK could be importing over 90 per cent of its gas by 2040.”