Cameron backing Obama in BP leak outcry

BP's tumbling share price fell a further seven per cent yesterday

amidst investor fears dividends will be slashed for the first time in almost 20 years, so wiping another 5bn off the value of Britain's largest company.

US President Barack Obama, under intense domestic pressure over his handling of the worst oil spill in American history, has been ratcheting up the pressure on the oil firm all week to improve its clean-up efforts. He and other members of his administration have repeatedly attacked the firm for spending money on advertising and shareholders, and President Obama this week called on BP chief executive Tony Hayward to resign.

Business leaders in the City of London are now mounting a backlash against the criticism, however, many spooked by the 50bn which has been wiped off the value of the firm since the Deepwater Horizon oil rig disaster on April 20.

London Mayor Boris Johnson yesterday echoed their concerns, suggesting "anti-British rhetoric" in the US was becoming a matter of "national concern".

Mr Johnson said the company was paying "a very heavy price" for the accident, and pointed out UK pension funds had a "huge exposure" to BP.

"I think that the best thing now is not to get into too much name-calling and buck passing and attempts to damage the reputation of a great British company, but to get on, to work together to sort it out," he said.

But party leader Mr Cameron refused to back the Mayor's stance, instead expressing support for President Obama.

Speaking in Afghanistan, Mr Cameron said he "completely understands" American frustration with BP.

"Obviously everyone wants everything to be done that can be done," he added. "Of course that is something I will be discussing with the American President."

Mr Cameron will discuss the fallout of the oil spill during a phone call with President Obama over the weekend, while Chancellor George Osborne contacted Mr Hayward yesterday on the request of the prime minister.

The effect of the ongoing crisis was again felt by BP investors yesterday, shares plunging as much as 12 per cent at one stage as US officials threatened to seek a ban on dividend payouts.

The company has so far refused to comment on the future of dividends, with the board due to make the decision at the end of July.

But it faces the wrath of the US government over payouts to shareholders while the leak is still pumping out oil into the Gulf at an estimated rate of up to 19,000 barrels a day.

As the clean-up continues along the Gulf Coast, BP said it plans to boost its ability to directly capture hundreds of thousands of gallons of oil gushing from the well by early next week.

BP's senior vice president of exploration and production, Kent Wells, said a semi-submersible drilling rig would capture and burn about 420,000 gallons of oil daily. Once on board, the oil and gas collected from the well would be sent down a boom and burned at sea.