The government faces the threat of legal action over plans to allow exploration at the Cambo oilfield near Shetland after promising to put an end to new oil exploration licences that do not align with the UK’s climate goals.

Greenpeace has threatened to take the government to court over the decision, which has triggered an outcry from climate experts and green campaigners in Scotland and across the UK in recent weeks.

In a letter to the business secretary, Kwasi Kwarteng, the green group urged the minister not to rubber-stamp a permit for the Cambo oilfield, which could produce 170m barrels of oil and produce emissions equivalent to 16 coal-fired power plants running for a year.

The approval would risk undermining the UK government’s recent decision to bar new oil exploration licences unless the oil driller can pass a “climate checkpoint” test that proves the fossil fuel is needed and can be produced with as small a carbon footprint as possible.

The Cambo project will not face the same scrutiny in part because it would be an extension of an existing oilfield owned by the private equity-backed oil explorer Siccar Point. UK’s climate change minister, Anne-Marie Trevelyan, said last month in a parliamentary committee meeting that Cambo was “not a new licence, there are no new licences this year”.

Greenpeace has also warned that approving the Cambo project could infringe a Dutch court ruling ordering Shell, which holds a 30% stake in the project, to cut its emissions by 45% from 2019 levels by the end of the decade. Shell has confirmed that it will appeal against the court ruling.

Mel Evans, the head of Greenpeace UK’s oil campaign, said: “The government is signing off on new oil and is wilfully ignoring the carbon emissions that come from burning the oil that’s extracted.”

“If the UK government approves Cambo we could torpedo the world’s chances of meeting climate targets, and Boris Johnson will be a figure of failure on the world stage at the upcoming Cop26 climate talks in Glasgow,” she said.

A government spokesperson said: “There is no loophole. The climate checkpoint will apply to future oil and gas rounds, while the Cambo oilfield was originally licensed in 2001. While we are working hard to drive down demand for fossil fuels, there will continue to be ongoing demand for oil and gas over the coming years, as recognised by the independent Climate Change Committee.”