One source close to the Energy Secretary insisted the former Labour leader was not a 'zealot on the eco issue'

Ed Miliband is set to back drilling in the North Sea and turn his back on Net Zero if he is named Chancellor under incoming Prime Minister Andy Burnham.

The Energy Secretary is understood to favour approving the Jackdaw development in the North Sea, located off the Aberdeen coast, in a move designed to reassure financial markets about his potential appointment to the Treasury.

Industry insiders suggest Mr Miliband views the decision as an opportunity to signal his willingness to work with the City ahead of Andy Burnham's expected arrival in Downing Street next Monday.

An insider told The Telegraph: "They want to do it. Ed Miliband sees it as a way of showing willing to the City but they are likely to follow the law."

However, Mr Miliband remains unable to publicly confirm his position until a public consultation period concludes in August.

The insider added: "There is a public consultation that does not end until August 10 and if they announce anything before then they would run the risk of a judicial review. So, privately, they are signalling that they want to do it."

Those close to the Energy Secretary have sought to counter his reputation as an environmental hardliner.

One source close to Mr Miliband told the Observer he was not a "zealot on the eco issue", adding: "He's much more a pragmatist than he's painted to be and that wouldn't be difficult to show, given the way he's being portrayed."

A formal ruling on Jackdaw would fall to his successor as Energy Secretary should Mr Miliband move to the Treasury.

The Government has faced mounting pressure from multiple quarters to approve further North Sea production.

Trade unions, the Conservative Party, former Prime Minister Sir Tony Blair and President Donald Trump have all urged Labour to restart drilling, while environmental groups and the Green Party have warned that reopening the fields would constitute "a climate crime".

The Jackdaw project could supply enough fuel to heat 1.4 million British homes this winter, according to reports.

Adura chief executive Neil McCulloch said last week that approval was "hyper-critical", stating the project could meet six per cent of the UK's gas demand from October 1.

Mr Burnham, who is expected to enter Downing Street next Monday, has already indicated he is "open-minded" about North Sea drilling to address the cost-of-living crisis.

Shadow Scottish Secretary Andrew Bowie has demanded the government go even further, calling for "maximum economic recovery" from Britain's fossil fuel reserves.

The MP for West Aberdeenshire and Kincardine argued that without domestic drilling, the UK would become increasingly dependent on foreign imports with higher associated emissions.

Mr Bowie told the BBC: "Let's get on and get what we can out of the North Sea as we move towards a more sustainable future."

The former energy minister backed drilling "everywhere that is conceivable" to protect jobs, particularly around Aberdeen, and bolster energy security.

Mr McCulloch has warned that Britain faces limited options in the event of a "gas supply emergency" such as adverse weather or sabotage by a hostile state.

He said: "The wells are drilled, they're hooked up. We're just readying the systems. It will be ready for October 1."

Environmental campaigners have condemned the potential approval of Jackdaw.

Deputy Director of environmental campaign group Uplift Robert Palmer said: "It is a bit rich of the oil and gas industry to claim it stands with workers, or that more drilling will improve energy security.

"After 60 years of drilling, the North Sea is a declining, ultra-mature basin. The UK has burned most of its gas and what’s left is mostly oil, the vast majority of which is exported and sold on international markets. New drilling will do little for energy security.

"[Labour] should ignore the special pleading of companies that have got very rich while households faced soaring energy bills and workers saw declining conditions and security.

"Instead, it should invest in industries with a future, like wind manufacturing, that can provide good jobs for generations of workers."