Britain must choose between meeting its climate change targets or exploiting vast untapped shale gas resources in the north of England since the two goals are incompatible, a new study has found.

The carbon cost of developing just 20 percent of shale reserves identified under Lancashire would blow about 15 percent of the UK government's greenhouse gas emissions budget through to 2050, a new study from the Tyndall Centre for Climate Change Research in Manchester shows.

Britain would almost certainly have to renege on its legally binding climate change commitments if it gives the go-ahead to extensive shale gas production in the UK, the report says.

Large-scale extraction of shale gas cannot be reconciled with the climate change commitments enshrined in the Copenhagen Accord of 2009, it said.

The report, commissioned by the Co-operative Group, also says the UK's regulatory system is not currently fit for adequately controlling the environmental risks, including groundwater contamination, that would occur if full scale extraction involving to up to 3,000 wells were to proceed.

It is shocking how little scrutiny and thoughtful consideration has been demonstrated by the UK government and its environmental agencies when it comes to shale gas, Paul Monaghan, head of social goals at the Co-operative said.

Not least because, evidence is now emerging which indicates that gas derived from shale may have a significantly greater carbon footprint than previously thought, seriously questioning whether it can play any role in the transition to a low carbon economy, Monaghan said.

New drilling techniques have helped transform U.S. energy markets with the advent of cheap shale gas production methods led by technological advances.

UK firm Cuadrilla Resources hopes to emulate the U.S. example by unlocking unconventional reserves of gas it has identified in Lanchashire.

Shale gas is extracted by pumping vast quantities of water and chemicals at high pressure deep underground, grinding shale rocks until trapped gas is released.

Environmentalists on both sides of the Atlantic have lobbied politicians to ban the system, called fracking on concerns it leads to pollution of ground water and leakage of gas into the atmosphere, adding to the carbon cost of shale drilling.

The Lichfield-based company has said its site near Blackpool had 200 trillion cubic feet of gas in place, enough to cover UK demand for years.

However, experts questioned the size of the find, and a financing conducted by a key shareholder in Cuadrilla suggested gas reserves were below the company's estimate.

(Editing by James Jukwey)