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* Third Energy shale permit first since ban lifted in 2012
* Friends of the Earth say to continue to oppose fracking
* Third Energy says welcomes verdict
By Karolin Schaps
LONDON, Dec 20 (Reuters) - Britain's High Court ruled onTuesday that a fracking permit awarded by a local council todeveloper Third Energy was legal, after it was challenged byenvironmental campaigners, opening the way to shale gasextraction in the UK.
Substantial amounts of shale gas are estimated to be trappedin underground rocks and the British government wants to exploitit to help offset declining North Sea oil and gas output, createsome 64,000 jobs and help economic growth.
The contested permit in Yorkshire, in the north of England,was the first approval for shale gas fracking since a moratoriumwas lifted in 2012.
"The substantive claim for judicial review is dismissed,"Justice Lang said in her written verdict on the case, rulingthat the permit remains valid.
Despite government support, progress has been slow due toregulatory hurdles and public protests, with environmentalgroups concerned fracking could contaminate groundwater and thatit is incompatible with fighting climate change.
"We will continue to campaign on behalf of local communitiesfor the sake of our children and their children's health andwell-being," said Jackie Cray, a co-claimant in the case.
Third Energy, which is owned by former employees of theBarclays Natural Resource Investments private equity business,had been expected to produce Britain's first shale gas this yearbefore its permit award was appealed.
The company said it was pleased with the ruling.
Since Third Energy was granted its permit, shale gasdeveloper Cuadrilla has gained approval for a second permit innorthwest England after the government intervened and overruleda local authority decision.
Other British shale gas developers include IGas,Egdon Resources and INEOS. (Editing by Louise Heavens and Alexander Smith)
