Battle for Greenland: Scottish tycoon Sir Bill Gammell is leading an oil rush into one of the world's most pristine environments and Greenpeace are determined to stop him

• Sir Bill Gammell

One battalion went to the Royal Bank of Scotland's Nicholson Street city centre branch, supergluing themselves to the walls and furniture in a successful effort to embarrass the Festival sponsor while the world was in town. Simultaneously, another cadre of activists invaded Forth Energy in Leith, climbing onto the roof to display banners and chaining themselves to railings in protest at the company's role in building four new power stations.

But perhaps the most was Cairn Energy. While the virtually non-existent defences of an RBS branch and Forth Energy's offices were easily overcome, the company headed up by former rugby internationalist Sir Bill Gammell was apparently a more daunting prospect. Rather than trying to storm the marbled halls of Cairn's headquarters, the activists limited themselves to creating an imitation oil slick outside the plush building in Lothian Road while unveiling banners which read "Cairn Energy - the new BP".

The cause of the activists' ire - they had set up camp inside the grounds of RBS' global headquarters at Gogarburn the previous week - is Cairn's involvement in Greenland, where they are the only company currently drilling for oil. The recent news that the company has found evidence of hydrocarbons within the 72,000 square kilometre block given to it by the Greenland government has sparked a new "oil" rush in one of the most pristine eco-systems in the world.

With a raft of licenses to drill due to be doled out by the Greenland government within the next month, oil and gas companies are queuing up to stake their claim to what some experts believe could be the single biggest reservoir of untapped fossil fuels in the world. The US Geological Survey last year suggested that there could be 90 billion barrels of oil and 50 trillion cubic metres of gas in the Arctic.

But where oil companies see a rich new seam of profit and energy, environmentalists look at the spectacularly inhospitable conditions in "iceberg alley" and see an accident waiting to happen.

Cue a new environmental "villain": Cairn Energy and its boss, Sir Bill. A multi-millionaire prospector who counts former US president George W Bush as a childhood friend - their fathers were in the oil business together as young men - Gammell is largely unknown outside business circles despite the success of his Scottish-based company. But if Greenpeace gets its way, Gammell and Cairn will soon rank alongside BP as one of the biggest threats to the global environment."Cairn represent the extreme recklessness of an oil industry determined to squeeze every last drop of oil out of the planet, no matter what the cost," says Greenpeace's Ben Ayliffe. "More than any other company, Cairn is determined to exploit the Arctic. No-one else is drilling there and it was Cairn who went out on a limb. They thrive on their reputation as a wildcat, maverick company that will take risks that no other company will take. They're selling their Indian operation and investing the money in Greenland, and by doing so they have nailed their colours to the mast. It's Greenland or bust for them, but the problem is that they will suck in countless other companies. That's why we're so serious about stopping them drilling in one of the most iconic parts of the world."

With Iceland, Norway and Russia all exploring the prospects for oil in their Arctic territories, Greenpeace and other pressure groups such as Friends of the Earth have drawn a line in the sand, and that line is around Greenland. The first priority is stopping Cairn's operation, which is why the symbolic protest taken against Cairn in Edinburgh was quickly followed up with concrete action as the Greenpeace ship Esperanza arrived in Greenland last week bristling with activists.

Unsurprisingly, Greenpeace's version of the facts is utterly refuted by Cairn and its many admirers. Its spokesman, Dave Nisbet, begins by addressing the allegations that its Greenland expedition has been funded by the loans from the World Bank and a 117m loan from RBS. Not true, he says: no bank would lend money for the excruciatingly expensive process of exploration, in which it usually takes 30 wells to be drilled before hitting paydirt (although Cairn's average is an impressive six). As if to make the point, he talks of the imminent sale of 51 per cent of Cairn's Indian operation to controversial mining conglomerate Vedanta Resources for $8.5bn, little more than a decade after buying the same concession from Shell for 7m. Cairn may have only made a small profit so far this year, but the company is clearly not on its uppers just yet. Cairn is reported to have spent almost 300m in Greenland already.

Cairn's case becomes ever more clear. It is only there at the invitation of a Greenland government desperate for any industry other than fishing, and if Cairn wasn't there another company would be; indeed Totale, Exxon and Chevron already are, and drilling began in Greenland as far back as the 1970s. As for the taboo of drilling so far north, there are already established operations in the Arctic Circle, in Russia at Sakhalin and at Prudhoe Bay in Alaska. And when it comes to dire conditions, those in which oil companies drill off the coast of Newfoundland are even worse. Besides, in "iceberg alley", Cairn will only drill for three months a year.

Throughout the discussion, there is a relentless emphasis on the company's safety record and procedures.Yes, Cairn can operate in inclement offshore conditions and has recruited a team with more than 1,000 hours of harsh-weather experience. No, comparisons with the Gulf of Mexico aren't relevant: wells in the Gulf were drilled down as far as 1,500m; wells off Greenland will be between 300-500m. Yes, Greenland has the strictest safety procedures in the world, modelled on those introduced by the British and Norwegians after the Piper Alpha disaster. No, the idea that Cairn is too small to deal with any spill is demonstrably inaccurate. Nor is Cairn's commitment to social responsibility (known in the trade as "greenwash") skin-deep, which is why the company is included in several ethical funds. Finally, Nisbet says that Cairn could have worked twice as quickly but over-engineered the project, working painfully slowly to ensure that they could be seen to be as meticulous and cautious as possible.

Untangling the truth is a painful process of he-says-she-says to which there is almost certainly no easy answers. Nisbet's statement that "we don't see interaction with Greenpeace as a confrontational process, everyone is allowed an opinion and we fully respect their views" should be treated with as much caution as Ayliffe's assertion that the British taxpayer would be left to pay for the clean-up should Cairn suffer the same fate as BP.

The one area where these two polar opposites do find common ground, however, is in agreeing why they will never agree. Greenpeace call Gammell and Cairn "wildcats" but this is simply a pejorative term for something that Nisbet puts in a positive light: "What differentiates us from others? It's that we're explorers".

RBC Capital Markets' oil analyst Nathan Piper says this goes to the heart of the issue. Cairn is built in the image of its restless founder and it shares his world-view and attributes: inquisitive, committed and focused. In the early 1990s, Gammell sank 20 per cent of Cairn's market capitalisation into drilling in deeply unfashionable Rajasthan in India, after Shell had concluded there were no significant amounts of oil present - and if shareholder value is the measure by which his company is judged, money is not the primary motivation for a man who has built up a 7bn company from scratch.

"They are explorers at heart, which is one of the reasons why they are selling the Indian operation; it simply didn't excite their senior management," says Piper. "Greenland, by contrast, offers the opportunity for huge returns - it's not without risk but Bill Gammell has shown in the past that he will back his own judgement, and in (deputy chief executive] Mike Watts he has one of the best geological explorers in the world. Greenland is now the entire focus of the company, and Bill Gammell will be entirely focused on it. He's no shrinking violet or bleeding-heart liberal, and while he's a private man who will find the flak mildly embarrassing, it won't deflect him.It would be an almost unthinkable change of strategy to stop drilling in Greenland. The wells that have already been drilled are among the most expensive in the world."

Gammell's status as an international rugby player and the founder-patron of the Winning Scotland Foundation - that funds young entrepreneurs - leaves little doubt that he is highly competitive, while the famous friends he keeps - he is still close to both Bush and Fettes schoolmate Tony Blair - suggests he has a thick enough skin to cope with Greenpeace's barbs.

Yet the pressure group is hardly giving up. As well as lobbying Greenland's premier, Kuupik Kleist, it is contacting investors and flexing its muscle to lobby for a worldwide ban on new deep-sea drilling. More direct action is a virtual certainty. The scrap between Scotland's leading oil baron and the praetorian guard of the eco-army is likely to be a grim battle to the end between two sides for whom there is no common ground except the watery battlefield itself.