The Government has said it will not challenge judicial reviews brought against developments for the Rosebank and Jackdaw offshore oil and gas fields in the North Sea, in order to “save the taxpayer money”.

The move has been welcomed by climate action groups, despite the licences for drilling at the sites not being withdrawn.

Greenpeace and Uplift jointly brought judicial reviews to stop the development of the Rosebank and Jackdaw fields.

If the judicial review backs the environmental groups, operators would need to resubmit environmental assessments, adding costs to the projects.

Rosebank is owned by Equinor and Ithaca Energy, and Jackdaw is owned by Shell.

The Rosebank oil field was approved by the previous government in September 2023. Located 80 miles west of Shetland, it is the UK’s largest untapped oil field and is estimated to contain up to 300 million barrels of oil.

The Jackdaw gas condensate field is being developed 155 miles east of Aberdeen and is expected to start production in 2025.

Sir Keir Starmer confirmed prior to the election that Labour would respect the Conservative government’s decision to approve the fields and would uphold existing oil and gas licences, whilst banning any new ones.

The new Government also said it would be consulting on the implementation of that manifesto position not to issue new oil and gas licences, in light of a Supreme Court ruling that has implications for the assessment of development consents.

The landmark Finch ruling requires regulators to consider the impact of burning oil and gas in the Environmental Impact Assessment for new projects.

The body responsible for reviewing applications to develop oil and gas, the North Sea Transition Authority (NSTA), granted consent for Equinor and Ithaca Energy to begin developing Rosebank, and at the time said it was “taking net-zero considerations into account throughout the project’s lifecycle”.

Net zero, as defined by the Government, only includes the emissions generated by the machinery used to extract the oil, not those from when it is burnt after being sold.

The general argument is that if another country buys and burns oil from UK waters, those emissions should count as belonging to that country, as the UK would count emissions from imported diesel burnt in cars on British roads as its own.

Greenpeace says that the applications should have at least considered the “direct and indirect effects of the use of the extracted hydrocarbons on human health, the environment and climate change”, but that this was “deliberately” excluded from an environmental impact assessment.

Energy minister Michael Shanks said: “This Government is committed to making Britain a clean energy superpower, helping to meet our first mission to kick-start economic growth.

“While we make that transition, the oil and gas industry will play an important role in the economy for decades to come.

“As we support the North Sea’s clean energy future, this Government is committed to protecting current and future generations of good jobs as we do so.

“We were elected with a mandate to deliver stability, certainty and growth. Every action we take will be in pursuit of that.

“We will consult at pace on new guidance that takes into account the Supreme Court’s ruling on Environmental Impact Assessments, to enable the industry to plan, secure jobs, and invest in our economy.”

Acting Cabinet Secretary for Energy Gillian Martin said the Scottish Government supports a “just transition” for Scotland’s valued oil and gas sector, which recognises the “declining nature of the North Sea basin”.

She said: “Our focus is on securing a vibrant future for the highly skilled workers in oil and gas to play a full part in our energy future. We have consistently said that decisions on oil and gas licensing should be made on a case-by-case basis and include rigorous assessments of both climate compatibility and energy security.”

Mel Evans, UK climate team leader at Greenpeace, said not defending legal action brought against the new oil and gas sites is “absolutely the right decision”.

They said: “These permits should never have been granted without being properly assessed for their impact on the climate, and following the Supreme Court ruling earlier this year, conceding these cases is the logical course of action.

“The two new fields combined would generate a vast amount of emissions while doing nothing to lower energy bills.

“The only real winners from giving them the green light would be multibillion-pound oil giants. Shell and Equinor should respect the Supreme Court’s decision and the Government’s position that their permits are illegal, and not waste time and money in greedy tactical legal battles.

“The Government must now make sure they prioritise public investment to support green jobs growth, that workers affected will be properly supported, and that the funding is ring-fenced for them to switch or retrain into sustainable jobs in renewable energy.”

Tessa Khan, executive director of Uplift, welcomed the announcement and said the approval of Rosebank was “unlawful”.

She said: “This Government has rightly accepted that this huge oil field cannot proceed without the full extent of the damage it will do to our climate being taken into account. It is astonishing that the massive emissions from burning oil and gas have been overlooked by decision-makers till now.

“This Government is right not to waste time and money trying to defend the indefensible. It’s now up to the Scottish courts to decide if Rosebank’s approval was unlawful.”

A Shell spokesperson said: “Jackdaw was approved in 2022 and we are carefully considering the implications of today’s announcement by the Government.

“We believe the Jackdaw field remains an important development for the UK, providing fuel to heat 1.4 million homes and supporting energy security, as other older gas fields reach the end of production.”