George Osborne is to approve the construction of up to 30 gas-fired power stations as part of tomorrow's Autumn Statement, angering environmentalists and exposing a rift within the coalition.
According to the Financial Times the chancellor wants to encourage investment in extracting gas from shale in a process known as "fracking".
The move will delight Tory MPs who are keen to see energy prices fall for consumers and are critical of the impact increased reliance on renewables will have on bills.
But the decision will anger environmentalists as fracking is already implicated in mini-earthquakes in Lancashire - and would rather see efforts directed at renewable sources of power, like wind and solar.
Friends of the Earth said the decision would be "reckless" and would send the nation "speeding in the wrong direction".
“Rocketing gas prices are the main reason our fuel prices have soared – and experts predict they will carry on rising," Friends of the Earth’s executive director Andy Atkins said.
“Building more gas-fired power stations will condemn households to increasingly expensive fuel bills, drive away investment in clean power and undermine UK targets for tackling climate change.
It will also expose another another internal coalition rift with Lib Dem energy secretary Ed Davey who has voiced opposition to shale gas.
He has previously said of the industry: "The right wing of the Tory party are trying to make out shale gas is the answer, but I’m afraid the evidence does not bear it out."
The fight over gas-fired power stations is not the first split within the Department of Energy and Climate Change.
Last month Tory energy minister John Hayes sparked a row with Davey after suggesting no more wind farms would be built.
And secret fim recorded by Greenpeace captured Tory politicians including Peter Lilley and Chris Heaton-Harris suggesting Osborne was orchestrating a plan behind the scenes to undermine the coalition's green agenda.
In another spat, David Cameron is said to have blocked Davey's attempt to appoint David Kennedy, chief executive of the Committee on Climate Change (CCC), as the new permanent secretary of the department.
The Independent has identified one potentially awkward problem for Osborne's fracking plan - his constituency of Tatton is a prime location for drilling.