Mr Davey said: "Shale gas represents a promising new potential energy resource for the UK. It could contribute significantly to our energy security, reducing our reliance on imported gas, as we move to a low carbon economy.
"My decision is based on the evidence. It comes after detailed study of the latest scientific research available and advice from leading experts in the field.
"We are still in the very early stages of shale gas exploration in the UK and it is likely to develop slowly. It is essential that its development should not come at the expense of local communities or the environment. Fracking must be safe and the public must be confident that it is safe.
"We are strengthening the stringent regime already in place with new controls around seismic risks. And as the industry develops we will remain vigilant to all emerging evidence to ensure fracking is safe and the local environment is protected.
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"The new Office of Unconventional Gas and Oil, led by DECC, will be able to focus regulatory effort where necessary to meet the needs of future production.
"Emissions of methane – which is a potent greenhouse gas - are already subject to control, but I am today commissioning a study of the possible impacts of shale gas development on greenhouse gas emissions and climate change."
To date there has been no commercial shale gas production in the UK. Exploratory fracking has been suspended since May 2011 after two small seismic tremors were detected near the country's only fracking operations in Lancashire.
Following a detailed study and further analysis by an independent panel of experts commissioned by the Department of Energy and Climate Change, with feedback from a wide public consultation, and the benefit of the report by the Royal Society and Royal Academy of Engineering, the Government has concluded that the seismic risks associated with fracking can be managed effectively with controls.
These controls, along with the rest of recommendations in the independent report into seismic activity and fracking commissioned by the Government and published in March this year, have been accepted by the Secretary of State.
The Secretary of State has also accepted all the recommendations of the Royal Society report which are relevant to Government.
The study of the possible impacts of shale gas development on greenhouse gas emissions and climate change will consider the available evidence on the lifecycle of greenhouse gas emissions from shale gas exploitation and the need for further research.
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