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Andy Burnham will announce plans for new oil and gas drilling in the North Sea when he becomes prime minister on Monday, the BBC has been told.
The Labour Party's 2024 manifesto - which the new leader said he would follow - had pledged to not issue new licences but to honour existing ones.
At the heart of the debate are two oil fields in Scotland - Rosebank and Jackdaw - which regulators approved in 2022 and 2023 under the then Conservative government, but were overturned in 2025 after a legal challenge.
The announcement will form part of a flurry of policy measures from Burnham, including plans to take water and energy companies under public control and a new council house-building programme.
While details of the new oil and gas plans are not clear, the North Sea row has become increasingly divisive as Labour figures debate the party's future direction over energy policy.
Some Labour MPs have urged the government to take a more liberal approach, warning that the transition away from oil and gas must protect jobs and the cost of energy bills.
Others have backed the government's existing approach, arguing that expanding renewable energy is key to improving energy security and reducing the impact on climate change.
Current Energy Secretary Ed Miliband - who is likely to get a senior cabinet role under Burnham - has been a staunch supporter of Labour's manifesto position, and previously described the licence issued to Rosebank as "climate vandalism".
Earlier this week, before the leadership nominations deadline, Burnham was issued with a letter from the oil and gas industry and trade unions calling on him - and all other Labour MPs - to "back North Sea oil and gas".
It stated that support for the oil and gas industry is "a signal that the country remains committed to producing, building and manufacturing.
"It is a signal that government backs the people and places that have powered this country for generations," the letter added.
Burnham, who returned to Parliament a month ago in a by-election, cemented his status as the sole leadership candidate after being backed by 379 Labour MPs, as well as all 11 trade unions affiliated to the party, earlier this week.
The new Labour leader has said he is finalising his top cabinet jobs before he takes over from Sir Keir Starmer on Monday.
