BP faces 'severe' time as payout fears rise

But embattled BP bosses told worried investors and pension savers they would meet obligations amid fears the group was preparing to slash its dividend payout.

In a briefing with BP shareholders and analysts, chief executive Tony Hayward said it would be another 48 hours before it was clear if latest attempts to contain the oil leak are working.

The group is taking fierce criticism of its response to the disaster from US President Barack Obama, who said he was "furious" about the oil spill and accused BP of not responding quickly enough.

Dividends are seen as crucial for investors and Britain's pension

funds, accounting for about 1 in every 7 of British blue chip dividend income each year.

BP said: "We fully understand the importance of our dividend to our shareholders.

"Future decisions on the quarterly dividend will be made by the board, as they always have been, on the basis of the circumstances at the time.

"All factors will be considered and the decision taken in the long-term interests of the shareholders."

Mr Hayward added: "The financial consequences of this incident will undoubtedly be severe, but BP is a strong company and we have weathered many storms before."

BP has already spent more than $1bn (XX bn) on containment and clean-up efforts since the the Deepwater Horizon rig exploded and sank on April 20, killing 11 workers.

It said in yesterday's investor update that spending was set to

continue at this rate "for some time beyond" work to stop the flow of oil.

BP hopes immediate costs for cleaning up and plugging the leak will largely be taken by the end of 2010, but stressed the long-term costs were still unknown.

The firm aims to provide more details on costs when it releases second quarter figures on July 27. BP is also due to announce its next shareholder dividend on that day, but is scheduled to pay out a previously announced dividend before then, on June 22.

Mr Hayward, who is also facing questions over his position at the helm of the group since the disaster struck, said people wanted a "simple answer".

But he added that the incident was a "complex accident brought about by an unprecedented combination of failures".

He said: "It is too early and not up to us to decide where the blame lies."

BP is facing the threat of criminal proceedings after the US government launched a criminal and civil investigation earlier this week.

Its shares have clawed back from the worst of its falls as bargain hunters have begun to move in on the shares and as confidence builds around BP's new move to contain the leak .