Prime Minister Scott Morrison has all but killed off an application to allow more gas exploration off the Hunter region's coast.
Asked at a press conference at Tomago on Thursday morning whether he supported extending the PEP 11 exploration licence, Mr Morrison said: "No."
Resources Minister Keith Pitt is weighing up an application to extend the licence to Advent Energy between Port Stephens and Sydney after it expired last month, but the Prime Minister offered an unequivocal rejection of the proposal.
Mr Morrison said he was stating "pretty clearly" that he did not support the licence renewal.
A local reporter commented at the media conference that his stance would make Port Stephens tourism operators very happy.
"It's going to make me very happy," Mr Morrison replied.
"I think that's the right decision."
Asked if he would push Mr Pitt to make a decision soon, Mr Morrison said it was an "issue the government's working through."
Mr Pitt, a Nationals MP, said later on Thursday that a "decision on PEP-11 has not yet been made".
"While I appreciate the issue has generated a lot of public discussion and differing opinions, as the decision maker I will carefully consider the proposal taking into account advice from the National Offshore Petroleum Titles Administrator and the legislation under which the application has been made before making an announcement," he said.
The licence extension is a politically sensitive issue in several marginal seats along the coast, including Paterson.
Liberal MPs Jason Falinski and Dave Sharma, whose electorates are on the Sydney coast, and independent Warringhah MP Zali Steggall have publicly opposed PEP 11.
In October, Mr Falinski likened the licence application to the "Sword of Damocles" hanging over coastal communities.
Opposition leader Anthony Albanese was in Nelson Bay on Tuesday to voice his concerns about offshore gas and met with tourism operators who oppose the plan.
He said extending the licence was a "dumb idea" that would put tourism jobs at risk.
Mr Albanese and Shortland MP Pat Conroy, the shadow minister assisting for climate change, said in a joint statement on Thursday that Mr Morrison had "hung Mr Pitt out to dry" and the "shaky" Liberal-Nationals coalition was again being tested.
Lucy Wicks, the Liberal member for Robertson on the Central Coast, said on Thursday that she "couldn't agree more" with Mr Morrison's sentiments.
"The Prime Minister has listened to the concerns of the Central Coast community and stands with us in saying no to extending the PEP 11 permit," she said.
"The oceans that we all love to swim in, fish in and go boating in are worth protecting so that we can enjoy them now and into the future."
Advent argues that its plans to explore and potentially drill for gas represent a "potential solution to substantial gas shortage issues".
Advent managing director David Breeze said on Thursday that the licence extension was "the decision of the minister that's responsible for that area, and we're awaiting that ministerial decision".
Mr Morrison's stance appears at odds with public comments by Mr Pitt and Energy Minister Angus Taylor.
Last month, Mr Pitt said he recognised the level of community concern about the project but would be swayed by Australia's national interests.
He said the exploration drill would be the size of a "dining room table" and Australia's gas industry was one of the most tightly regulated in the world.
NSW Deputy Premier John Barilaro, who is also NSW Minister for Industry and Trade, told the Newcastle Herald last month that the state government's position had not changed since it declared it would not support applications to extend the life of PEP 11 in 2017.
Save Our Coast founder Natasha Deen said she was "delighted" with the Prime Minister's comments, a year after the group presented a 78,000-strong petition to Parliament.
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"We strongly welcome the Prime Minister's support for the end of the ecologically disastrous project that is Petroleum Exploration Permit 11," she said.
"This is a testament to the strong community support of our Save Our Coast campaign to end the flawed and devastating plan to drill and blast for fossil fuels off our beautiful coast that risks devastating our coastal ecosystem, marine animals, climate and our way of life.
"I am proud and humbled to have started this campaign to Save Our Coast and to see the momentum it has achieved ... and delighted to have received historic bipartisan political support in our campaign to stop PEP 11, including this incredible support from the Prime Minister today.
"However, we hope the Prime Minister ensures his colleague Keith Pitt heeds the clear wishes of the community, his NSW counterpart John Barilaro, and now the Prime Minster himself, and refuses the extension of the permit.
"The community expects more than words and we won't stop until this flawed and risky plan has been officially cancelled and our beautiful coast saved."
Hunter indigenous leader Uncle Bill said, given the opportunity to talk to Mr Morrison, he would "tell him I appreciate and respect him for it, but don't just talk: actions speak louder than words".
"As an indigenous person, we're very much against it. Enough damage has already happened to this country, to all the waterways and ocean."
Wilderness Society Newcastle spokesperson Eleanor Lawless said the Prime Minister was "standing in support of our precious and diverse marine ecosystems, our beautiful beaches and our tourism and fishing industries".
"Now Keith Pitt needs to listen to his colleagues and the Australian community in ruling against the proposed offshore gas field in the PEP 11 zone," she said.
Newcastle professional surfer Belinda Baggs, a founder of Surfers for Climate Action, said the Prime Minister's words were "incredibly welcomed by every beach user, putting us one step closer to squashing the threat of industrialisation and abolishing the PEP 11 licence".
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