David Cameron has issued a warning to Brussels not to stand in the way of Britain's drive to exploit its reserves of shale gas through the use of controversial fracking technology.
Addressing the World Economic Forum in Davos, the Prime Minister said the development of "cheap and predictable" energy sources could help to reverse the "off-shoring" of European jobs to the rising economic powers of Asia where labour costs are lower.
But he warned that the opportunities presented by shale gas - which had helped transform the US economy - could be undermined if the European Union sought to impose unnecessary new regulations.
"To relocate in Europe, businesses will be encouraged by cheap and predictable sources of energy," he said.
"We should be clear that if the European Union or its member states impose burdensome, unjustified or premature regulatory burdens on shale gas exploration in Europe investors will quickly head elsewhere.
"Oil and gas will still be plentifully produced, but Europe will be dry."
Mr Cameron acknowledged there were genuine concerns about fracking, but insisted that if it was done properly, it could have significant benefits both for the economy and the environment.
"We need the right regulations - such as ensuring that well casings are set at the right depths with tight seals. And governments need to reassure people that nothing would go ahead if there were environmental dangers.
"But if this is done properly, shale gas can actually have lower emissions than imported gas."
He was scathing about the tendency of Brussels to produce "incredibly complex and overwritten directives" which deterred business from investing in the EU and creating jobs.
"There are still people who think that the key to success is ever greater social protections and more regulations," he said.
"Some in the European Commission seem to think that if they're not producing new regulations, they're somehow not doing their job and that removing existing regulations is somehow an act of self-harm, while some in the European Parliament are tempted to gold-plate every piece of legislation.
"Let's be clear. We don't protect workers by piling on the regulations and directives to such an extent that they become unemployable. We have to maintain the flexibility for companies to grow and expand."
Challenged during a question and answer session by a Swedish MEP, Mr Cameron said it was a "permanent battle" to hold back new regulation and that the EU needed a dose of "practical, good, Conservative common sense".
"I am confident that we are making some progress. The European Commission for the first time is not just looking at regulations it might bring in; it is now looking at regulations it might scrap. It is going to have a scorecard for how it is getting on. That is a British initiative," he said.
In his speech, the Prime Minister sought to counter the "dystopian vision" that the West was locked in a cycle of "inevitable decline" compared to a resurgent East.
"For years the West has been written off. People say that we are facing some sort of inevitable decline. They say we can't make anything any more," he said.
"Whether it's the shift from manufacturing to services, or the transfer from manual jobs to machines, the end point is the same dystopian vision; the East wins while the West loses; and the workers lose while the machines win. I don't believe it has to be this way.
"Indeed if we make the right decisions, we may also see more of what has been a small but discernible trend where some jobs that were once off-shored are coming back from East to West."
Friends of the Earth accused Mr Cameron of ignoring the expert advice on the the impact of shale gas exploration in the UK.
"Industry experts have warned that fracking won't lead to cheaper fuel bills, and only last week BP said switching to shale gas will do little to cut emissions," said FoE h ead of campaigns Andrew Pendleton.
"The best way to create jobs, boost the economy and tackle rocketing fuel bills is to invest in energy efficiency and develop the UK's world-class renewable power potential."