The Chancellor has announced support for a new tax regime to support low-cost energy sources such as shale gas - in the form of a new field allowance.

'I am introducing a generous new tax regime, including a shale gas field allowance, to promote early investment.

'For the North Sea, we will this year sign contracts for future decommissioning relief, the expectation of which is already increasing investment there,' he said.

Government is expected to consult on the plans, which are set to include the ring fencing of expenditure for shale gas projects, from six to 10 years.

Among the details expected to be considered are whether the reforms should be extended to other forms of onshore unconventional gas.

The Treasury said it will produce technical planning guidance by July 2013 to provide clarity around planning for shale gas during the exploration phase. This is to ensure an effective planning system is in place and by the end of the year will produce guidance for the industry to ensure the planning system is properly aligned with the licensing regime and regulatory regimes principally: health and safety; and environmental protection.

The guidance is also expected to provide details on how local communities can benefit from proposed explorations for shale gas in their areas.

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