Anti-fracking campaigners claimed a surprise victory on Thursday against attempts to extract oil in the home counties.

Dozens of protesters blockaded a drill site outside the West Sussex village of Balcombe. The drill was operated by Cuadrilla, the energy company headed by former BP chief Lord Browne.

Earlier in the day, the Department for Energy granted a drilling permit for the site to Cuadrilla, which also operates hydraulic fracturing rigs in Lancashire. It is looking for oil in the Sussex shale and says it may need to use controversial high pressure hydraulic fracturing techniques to extract it.

After a seven hour stand-off between Cuadrilla and a group of environmentalists and local opponents – including several groups of parents and children from the village – a lorry that was carrying a generator essential for the drilling on the site was forced to move away, bringing cheers from the protesters. Drilling 3,000ft into the rock had been due to start on Monday.

Officers from Sussex Police earlier warned protesters they would bring in forces to remove anyone who would not make way for the lorry but they later reversed their decision.

Police alleged that the truck had been sabotaged with its air brake cables cut by protesters. Some had wrapped yellow and black "climate crime scene" tape around the equipment and hung a banner on it that read "no more dirty energy".

A spokesman for Cuadrilla who said it was "disappointed" not to get its equipment on site added "but we are hopeful that deliveries will soon be able to continue". It said safety of the public, including protestors, was a priority.

The setback for one of the UK's highest profile potential fracking sites in the government's electoral heartlands comes as the coalition said it will encourage fracking by bringing in tax cuts. Last week, the chancellor George Osborne announced tax on profits from fracking in Britain would be 30% compared to a top rate of 62% for North Sea oil. The British Geological Survey has estimated there could be enough shale gas in Britain to supply the country for 25 years and the campaign victory could galvanise opposition to proposed new sites, protesters said.

"People see the fracking industry as a direct threat to their health and environment," said Josie Wiltshire, an anti-fracking activist. "The size of this blockade goes to show people feel the need to protect themselves. We'll definitely be back tomorrow".

But the village of Balcombe is not united against Cuadrilla and some protesters complained the turnout of up to 100 people was disappointing.

"There is mass hysteria in the village and the fears are ungrounded," said Katherine Gunning, a local resident. "Most of the village is not anti-fracking."

That is disputed by campaign leaders who said surveys showed a large majority are opposed to Cuadrilla's operations. Many cite fears about damage to water courses from toxic chemicals used to fracture the rocks to release fuel, the impact of trucks rolling through the village and the possibility of earth tremors.

"I am horrified to discover what is happening on our doorstep," said Louisa Delpy, a mother of two from Balcombe. "The pollution to the air and soil is unacceptable. I have lost faith in the agencies that are meant to protect us. I am going to stand here and stop this happening."

Others said they felt government decisions to allow the exploratory drilling had moved too fast. "The speed at which the Environment Agency has considered hundreds of responses begs the question as to whether they are properly considering the impacts or rushing ahead," said Friends of the Earth South East Regional campaigner Brenda Pollack.

The protest had a festive atmosphere with parents bringing children on their school holidays, picnics, musicians and a community singalong with the words to Row Your Boat substituted with "Blow, blow, blow your gas/ up into the sky;/ kill the birds and kill the bats/ and watch the rivers die".

"I don't want it to happen," said Jack, aged nine. "I haven't been to a protest before. It's sort of scary sometimes. But this is poisoning the water and I want clean water and I don't want the air polluted either."