Natural gas began to flow on Saturday in the pipeline under the Mediterranean from the Tamar gas field to the Israeli port of Ashdod.

The first full-scale operation of the pipeline raises hopes for economic and environmental gains for Israel.

But it has also revived the political controversy over the division of gas revenues and even caused a religious furore over the opening of the pipeline on Shabbat.

The gas is extracted from five undersea wells about 60 miles west of Haifa, and pumped through a 95-mile-long pipe to an offshore installation near Ashdod.

From there, it goes to a coastal station for distribution to Israeli power stations as well as, in the future, to factories.

Nobel Energy, the main foreign partner in the project, claims the natural gas will save Israel’s economy more than two billion pounds annually over the next 30 years, aside from dramatically reducing the amount of carbon dioxide in the environment and making local industry much more competitive.

President Shimon Peres and Prime Minister Benjamin Netanyahu were quick to announce that Israel was on the way to energy independence and praised businessman Yitzhak Teshuva who had financed the gas explorations.

Labour and opposition leader Shelly Yacimovich was more critical. She recalled that “Teshuva fought an aggressive and obscene campaign for over a decade to deny the state and Israelis from benefiting fairly from this natural treasure — which we all own.”

Two government commissions were formed to resolve the controversial issues of the division of revenues from the natural gas and the amount of gas that would be reserved for national use.

A compromise was reached allowing the private companies around 45 per cent of the revenue and part of the gas to be exported at higher prices, while fixing the price of gas sufficient for Israel’s energy needs over the next 25 years.

Another row followed the decision to start operating the pipeline on Shabbat. President Peres later admitted that the timing had been a “mistake.”

A larger Israeli gas field, Leviathan, is still in early stages of exploration and talks are under way with Turkey over the prospect of a new pipeline to allow Israel to export natural gas to Europe.