Waltham Forest Council has refused permission to allow the exploration of shale gas in the borough.
The controversial practice of hydraulic fracturing, more commonly known as ‘fracking’, involves drilling and injecting fluid into the ground at high pressure to extract natural resources.
David Cameron recently announced plans to reward councils with financial incentives if they agree to the exploration of shale gas in the community.
Under the plans, local councils will be allowed to keep 100 per cent of the business rates shale operators pay, and could bring in an estimated £1.7 million a year from drilling in one site.
Deputy leader and cabinet member for environment, Cllr Clyde Loakes, said:
"In Waltham Forest we have no intention of allowing fracking.
"Regardless of what financial benefits might be on offer, we will not compromise the safety and wellbeing of our current or future residents."
He also labelled central government's attempt to win over councils by offering financial incentives as a "crude manoeuvre".
He added: "This is a pretty crude manoeuvre by the coalition Government to pave the way for fracking wherever it is possible, and councils will be prepared to take advantage of the revenue that can be raised by opening themselves up to this practice - but not us."
Opinion is sharply divided on the safety of fracking, with the Royal Society and the Royal Academy of Engineering finding it to be safe if regulations were in place.