AN energy firm behind a plan to launch the region's first fracking site has dismissed a Government report which found the controversial gas extraction method could reduce house prices by up to seven per cent.

Third Energy, which is set to resubmit an application to North Yorkshire County Council to hydraulically stimulate and test various geological formations at Kirby Misperton, near Pickering, said the Department of Environment, Food and Rural Affairs report did not stand up to scrutiny.

The government originally published Shale Gas: Rural Economy Impacts, with several key sections blanked out last summer, but has been forced to publish it in full after an order by the Information Commissioner.

The report states large numbers of rural communities may be affected by the expansion of shale gas activities in the North East.

Redacted sections of the restricted document included a claim that house prices could fall by up to seven per cent in areas near shale gas exploration sites, while rents may increase due to additional demand from site workers and the supply chain.

The report states fracking operations could have an adverse impact on traffic congestion, noise or air quality depending on existing roads, traffic and air quality.

It also suggested houses within five miles of the fracking operation could face additional insurance costs to cover losses in the event of explosions on the site and that losses from tourists

avoiding area may be off-set by increased hospitality to new workers.

It states: "Shale gas development may transform a previously pristine and quiet natural region, bringing increased industrialisation."

A Defra spokesman said the paper was an early draft of an internal document, featured conclusions which amounted to unsubstantiated conjecture and that work on it had been discontinued.

A Third Energy spokesman said the report included no new research and was a review of existing literature, much of it from North America, which had contrasting regulatory and planning regimes to the United Kingdom.

He added: "The report does conclude the economic impacts would be mainly positive and the environmental impacts low or localised.

“Third Energy has been drilling for and producing gas in North Yorkshire, safely and with a low environmental impact, for more than two decades.

"In fact, the site of our proposed hydraulic fracturing at Kirby Misperton has been an operational well pad for 30 years and the hydraulic fracturing will be for a shorter duration and involve less traffic than drilling a well.”

A spokesman for campaign group Frack Free Ryedale said it was pleased the Government had bowed to public pressure and released the full report on the effects of fracking on rural communities.

He said: "We can see why the Government tried to hide this from the public for so long.

"The report confirms that fracking near your home would mean lower house prices, higher insurance premiums, health risks and environmental damage. 

"The fact that the report confirmed that leakage of waste fluids could affect human health through polluted water or the consumption of contaminated agricultural products will do nothing to persuade farmers in Ryedale to allow fracking anywhere near their land.

"Not one community has welcomed fracking, and now it's clear to everyone why people are fighting so hard to prevent this industry getting established in the UK."