TAX breaks to pump-prime what is tipped to be a new booming North Sea gas industry are demanded by an influential committee of MPs today.

Ministers are urged to throw their weight behind the controversial practice of 'shale gas' drilling - amid predictions that "massive"

reserves will be found off the North-East coast.

The British Geological Survey believes Britain could be "self-sufficient"

in gas supplies if the North Sea reserves were tapped, while warning the expertise does not currently exist.

Now the all-party energy and climate change committee has called for the North Sea to be at the heart of a predicted £28bn industry - just as its conventional oil and gas production declines rapidly.

Its report noted that the technology is unproven offshore, but added: "Deepwater drilling was once considered unconventional."

And it concluded: "There is substantial evidence that UK offshore unconventional gas resources could dwarf the potential onshore supplies.

"While these might be economically unviable at present, "uneconomic"

reserves can become economic quickly, as technology and prices shift.

"We recommend that DECC [department for energy and climate change] encourage the development of the offshore shale gas industry in the UK, working with HM Treasury to explore the impacts of tax breaks to the sector."

Onshore, the process is hugely controversial, because it involves pumping chemicals underground at high pressures to fracture the rock and release gas, a process known as "fracking".

In America, residents of a number of towns close to shale gas drilling locations complained their tap water turned cloudy and gassy - and could even be ignited.

But, in its report, the energy and climate change committee said it had found no evidence that 'fracking' posed any risk to water supplies.

It ruled out similar problems in Britain, provided the drilling wells were constructed properly - which meant a moratorium was not "justified or necessary" at present.

Tim Yeo, the committee's Conservative chairman, said: "Regulations in the UK are stronger than in the States and should stop anything of the sort from happening here."

However, the MPs said large-scale exploitation of shale gas could steer investment away from lower carbon energy sources, such as renewables.

And the committee warned the large volumes of water needed for the process could cause problems in regions where water supplies are already stretched.

The BGS has not pinpointed where, in the North Sea, the shale gas reserves are located. However, it is thought they might be close to conventional gas fields - many of which are off the North-East coast.