One local government has approved a development application for large, permanent protesters’ campsite.

The Gloucester Shire Council this week approved an application for the site on the town’s outskirts, where community campaigners have been protesting against gas company AGL's “fracking” plans.

The region is a hotbed of community-based anti-CSG sentiment, and activists have been set up at the Gloucester site for some time.

The Mayor of Gloucester Mayor said the approval would help to avoid a situation like the one that unfolded in the nearby town of Bentley.

Hundreds of police were called to Bentley in May this year, after thousands of protesters turned up to stop gas company Metgasco from drilling a test CSG well.

The Gloucester camp approval has conditions aimed at keeping a lid on events, such as a two hundred person capacity, six month limit, and a $26 thousand deposit.

People will be signed in and out of the camp, with no more than two hundred allowed to stay overnight.

AGL has indicated that it will not mount a legal challenge to the camp, and hopes to work with the protest group while continuing its test drilling.

Among the 27 conditions the Council has placed on the approval were; a requirement that it have its own security, a limited timeframe and noise restrictions.