David Cameron has issued a warning to Brussels not to stand in the way of Britain exploiting its reserves of shale gas through the controversial practice of fracking.
Addressing the World Economic Forum in Davos, the Prime Minister said the prospect of developing "cheap and predictable" energy sources could help to attract back to the Europe jobs which had been "off-shored" to the rising economic powers of Asia.
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 that there were genuine concerns about fracking, but said 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."
The Prime Minister was scathing about the tendency of Brussels to produce "incredibly complex and overwritten directives" which deter business from creating new 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."
Mr Cameron rejected the idea that the West was locked in a cycle of "inevitable decline", arguing that there was now an opportunity to "re-shore" jobs which had been "off-shored" to the 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.
"Of course, we cannot be starry-eyed about globalisation - it presents huge challenges as our economies and societies try to adapt. But neither should we take this pessimistic view," he said.
"If we engage in the right way, if we get the fundamentals of our economies right, sort out our debts, maximise our competitiveness and build on our strengths, then globalisation offers our businesses the chance to win new contracts to export into markets that were previously closed and create jobs fulfilling the demands of new consumers thousands of miles away.
"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."
Earlier Chancellor George Osborne dismissed suggestions the Bank of England's policy of "forward guidance" - intended to offer businesses and consumers some certainty about future interest rates - had failed.
Bank Governor Mark Carney was yesterday forced to declare there was "no immediate need" for a rate rise after the unemployment rate tumbled to 7.1% - close to the 7% threshold at which the Bank has said it would consider an increase in the cost of borrowing.
Mr Osborne, also speaking in Davos, insisted that the faster-than-expected fall in the level of joblessness was a sign that economic policy was working.
"Thanks to the success of policy - both Bank of England policy and Government policy - unemployment is falling very quickly so people are talking about what comes next. That's a challenge of a success rather than a problem or a failure," he said.
"I completely reject that forward guidance is a failure. I think what the Bank of England has done is provided clear communication, supported monetary policy that has assisted, alongside the Government's efforts, a very strong new set of data in the United Kingdom.
"They are the equivalent in the US of five or six hundred thousand jobs a month. We have had a rapid fall in unemployment, I can't see that's a failure of economic policy-making in the UK. I think it's sustainable precisely because we have both the credible monetary framework but it sits alongside a credible fiscal framework which comes down to the difficult decisions the Government has taken."