Cameron to fight BP's corner with US president

OIL giant BP took more stock market punishment yesterday as shares collapsed to a 14-year low amid growing fears of a short-term funding crisis sparked by the Gulf of Mexico disaster.

As much as 5.5 billion was wiped off the under-fire oil giant as shares plunged 9 per cent at one point to below 300p – levels not seen since August 1996.

Despite assurances over measures to improve the capture of oil and progress on relief wells to kill the flow, BP said clean-up costs had risen to 1.6bn.

BP is likely to be discussed when Prime Minister David Cameron meets US president Barack Obama on the fringes of the G20 summit in Toronto, Canada, today.

Mr Cameron said he would be using "quiet diplomacy" to make the case for BP to have certainty about the liabilities it is likely to face in the future.

In an interview with Canadian broadcaster CBC, Mr Cameron said: "I completely understand how people feel if you live in the Gulf, and can see the pollution and what has happened to the wildlife and the communities and the beaches.

"It is heartbreaking to see. This is an environmental catastrophe and we should feel sympathy and understanding for people who are suffering in that way."

He added: "I think it is also in all our long-term interests that there is some clarity, some finality, to all of this."