Leaking BP well is plugged — for now

BP HAS finally capped the leak that has seen oil spewing into the Gulf of Mexico since April.

The company confirmed last night that it had temporarily stopped the flow of oil, which has so far cost $3.5 billion (2.3bn) in spillage and clean-up.

The well has been sealed with a test cap that should stop crude oil spilling into the ocean for 48 hours.

But BP stressed that even if the test was successful, it would not mean the flow of oil and gas had been stopped permanently.

At a White House briefing last night US president Barack Obama, who has also faced fierce criticism over his handing of the crisis, offered a cautious welcome to the news.

"I think it is a positive sign, we are still in the testing stage. I will have more to say about it tomorrow," he said.

BP executive Kent Wells said the oil stopped at 7:25pm UK time.

BP shares rose dramatically in New York trading yesterday in advance of the flow being stopped.

The disastrous leak began when the Deepwater Horizon rig exploded on 20 April, killing 11 workers.

BP shares were hammered by the disaster, but have shown signs of recovery in recent days amid speculation of a takeover by US rival ExxonMobil and hopes of progress on the leak.

BP is vital to the UK not only as an employer but as a major taxpayer and contributor to pensions. Of every 7 paid into pensions from dividends 1 comes directly from BP and last year it paid 5.8bn in taxes.

This year BP is not paying a dividend for the first time since the Second World War, although it insists it is financially strong.