Campaigners have welcomed a decision by Cluff Natural Resources to put plans to extract gas from coal under the Firth of Forth on hold.
The company says work on the application has been postponed due to politicial uncertainty. Cluff had been seeking permission to extract near Kincardine.
In a statement, a Cluff Natural Resources spokesperson said: "Accordingly we have deemed it prudent to await clarity on these matters before committing fully to, in particular, the expense of an Environmental Impact Study. As a result, work on a planning application will likely be postponed until after such time as the political situation is more certain. Preparatory work including site selection studies, modelling and design work are however well underway"
Environmentalists have been calling on the Scottish Government to extend a moratorium on fracking to cover underground coal gasification.
Mid Scotland and Fife MSP Claire Baker said: "Having been consistently campaigning against UCG in Fife, I am glad to see that Cluff has finally seen common sense and postponed their work on gaining planning permission.
"However, as Cluff make clear, they are still planning to move forward with their preparatory work.
"That is why the Scottish Government must now act to close the UCG loophole I revealed in January. Only then will we be able to put to bed, once and for all, plans for UCG in Fife."
Meanwhile, Dunfermline and West Fife MP, Douglas Chapman said "All the local SNP MPs met with Cluff Natural Resources earlier this month and I felt there were significant gaps in their approach, especially around the geology of this part of the Forth and whether an environmental appraisal would meet the strict guidelines already in place through local councils and SEPA.
"The Scottish Government has already placed a moratorium to stop fracking and, although UCG offshore is outwith our government's powers, Cluff have said that the SNP's direction of travel with regard to these unconventional activities was a major contributory factor in the company shelving their UCG project in Fife.
"I am delighted with the Cluff announcement and hopefully we can find ways of making this "postponement" permanent."