Government moves to persuade councils to support fracking have been condemned as giving them "contradictory roles" and undermining trust in local government decisions, according to anti-fracking campaigners and an MP whose constituency has a site that is being explored for drilling.

The prime minister, David Cameron, announced on a visit to a site close to Gainsborough in Lincolnshire on Monday that councils would be allowed to keep 100% of business rates from fracking operations rather than 50% as before, on top of other local incentives already announced. Cameron said that Britain is "going all out for shale" as the French oil major Total announced it was taking a 40% share in the drilling operations in the Gainsborough trough.

But Barbara Keeley, the Labour MP Worsley and Eccles South, which includes the Barton Moss site that has been the target of major anti-fracking protests, told the Guardian: "To me, it [100% business rates] muddies the water to give councils two contradictory roles. One is a protective role, to check companies have safeguards. On the other hand, you have a cash strapped authority that's lost £100m off its budget, like ours, that gets offered this cash incentive in business rates. The public involved in this, who live near the site, how can they trust the local council will make the right decision on this?"

She also raised concerns about that government had not factored in the policing costs for the controversial extraction method. Sussex police said protests at a Cuadrilla-owned drilling site near Balcombe in West Sussex last summer had cost more than £3m, and Keeley said Greater Manchester police was spending £40,000 a day on the Salford protests, which have seen dozens of arrests, largely for obstructing a highway. "The process is so controversial, that the policing costs are much, much higher than anything that comes back. The policing side has just not been thought through."

Harry Huyton, head of energy policy for the RSPB, which has over a million members, said: "Today's announcement that local councils are to receive millions in business rates for shale gas developments that are permitted in their area undermines promises to ensure fracking operations do not damage our countryside and its wildlife. Rather than being rewarded for protecting the natural environment, councils are getting their bonuses for letting fracking take place."

Total's entry into the UK shale gas market was described as a "watershed event" for the industry across Europe, according to the boss of a US shale gas company. The French energy company announced on Monday that it is taking a 40% share in two shale gas exploration licenses in the East Midlands.

John Thrash, chief executive of eCorp International, said: "The entry of this highly respected global shale operator into the UK shale gas exploration effort is a watershed event, not only for the UK, but also, we believe, continental Europe."

The Total licences are for a 240 sq km area around the town of Gainsborough, that has been drilled for oil and gas for decades but has recently been explored for its shale gas potential. The company's partners are a subsidiary of Dart Energy Europe, which has come under attack from environmentalists for applying for coal-bed methane wells in Scotland, plus Egdon Resources UK, eCorp, and IGas, which has been the target of a sustained campaign against by anti-fracking groups at its Barton Moss site in Salford.

Speaking at the IGas site, Cameron defended fracking for shale gas. "We have the strongest environmental controls in this country, nothing would go ahead if there were environmental dangers. I think people can be reassured by that. But I actually believe it's when these wells go ahead, when people start to see the benefit, when people see there aren't environmental concerns, they will see that it is quite right that this is part of our long-term economic plan," he said.

A Total spokesman said the company's familiarity with the UK market and history of oil and gas extraction in the North Sea were factors in its investment. "We know the UK, it is a very important production country for us." He added that tax breaks from the UK government were not the main attraction for the company, and said Total would work with communities were it explores for shale gas. "Of course we cannot do something against the people living there. We know that from Denmark," he said.

Sir Merrick Cockell, chair of the Local Government Association, welcomed the new incentives for councils to back fracking projects. "It's very good news today that we are going to keep 100% of the business rates," he told the BBC's Today programme. "They [fracking companies] would like to have local consensus and broad local support."

However, he said the promise of 1% of fracking companies' revenues being paid to local communities, announced by the government last year, was "a token offer" and said they should get 10% instead – paid not to councils but into a local community fund. "We think if government is getting 62 to 63% of revenue then local communities should get their fair share of that."

Environmental campaigners warned that local authorities could face serious conflicts of interest as they weigh extra tax revenues against approving drilling for shale gas.

Jane Thomas, Friends of the Earth senior campaigner, said: "This latest government move highlights the depth of local opposition to fracking and the desperate lengths ministers are prepared to go to overcome it. People are right to be concerned about the impact of shale gas extraction on their communities – especially as experts say it won't lead to cheaper fuel bills. This move raises potentially serious concerns about conflicts of interest, if councils that benefit from this money are also the ones who decide on planning applications from fracking firms in the first place."

Tina Rothery, of the group Residents Action on Fylde fracking, had travelled to Gainsborough in a group of 17 on coach from Lancashire, to protest against Total's investment and the new business rate incentives. "There's been drilling here for decades, and he [Cameron] is going to pretend that's the same as high volume hydraulic fracturing, which it's not. This means huge volumes of water and lots of wells, the sound of flaring, the risk to your aquifer, to your agriculture. This is nothing like drilling as local people know it."

She described the 100% business rates for local councils as a way to "pay off local councillors", that Total was putting British people "at risk" and that France was right to have banned fracking.

Hundreds of people marched in Salford on Sunday against an IGas site at Barton Moss, which has been the focus of weeks of anti-fracking protests.

Wendy Rayner, a campaigner at Frack Off, which supports the Barton Moss protests, said: "Despite an increasingly garish public relations campaign from the government, the industry is losing. The reality is that each well the fracking companies attempt to drill is being met by months of community blockading and millions in policing costs."

Tracey Wright, a campaigner for No Dash for Gas, which helped organise the Balcombe protests, said: "David Cameron's so-called 'sweetener' is actually poisonous. It flouts democratic processes, attempts to bribe communities and councils and ultimately serves the interests of an industry which is unwanted, unsustainable and unsafe for people and climate. Cameron can be bought by big business but communities won't be - we've seen that in Barton Moss and Balcombe."

Peter Cranie, north-west Green party European election candidate, said: "The government is now resorting to effectively bribing local residents in a desperate attempt to impose fracking on our communities. This money is being snatched from vital public services, already under huge pressure due to government cuts."