More woe for BP as clean-up costs climb to £1.3bn

The blue-chip stock dropped more than 3 per cent amid growing concerns over the ultimate cost of the spill, with reports over the weekend suggesting it was planning to raise 50 billion dollars (33.76bn) to cover response efforts – more than double the amount previously thought.

Pressure on the group is showing no sign of easing after yet more blows to its reputation since chief executive Tony Hayward's mauling at the hands of US politicians last week.

Mr Hayward was pilloried in the US for spending yesterday sailing around the Isle of Wight, while the group was forced to halt oil recovery from one of the ships taking part in the operation for 10 hours.

BP said around 11,050 barrels were recovered on Saturday from the ship, which was below recent levels.

And an internal BP document released yesterday by a US congressman indicated that the scale of the crisis could be even worse than feared – with the potential for around 100,000 barrels of oil a day to spew out if all equipment restricting the flow was removed and company models were wrong.

It is thought BP approved a scheme last week to raise money in a bid to ensure the group has enough reserves to cover any claims as a result of the disaster.

The reported figure is more than double the 20bn US dollars (13.5bn) announced last week by BP to go into a compensation fund for those affected by the spill, although analysts have warned that the final cost of the disaster could be as much as 100bn US dollars (67.5bn).

BP is expected to start raising the cash as early as this week through a 10bn US dollar (6.75bn) bond sale.

It is also understood to be in talks with banks to raise a further 20bn US dollars through loans, with another 20bn US dollars raised through assets sales in the coming two years.

The company has already scrapped shareholder dividends until the end of the year to help pay for the clean-up operation.

Reports of the fundraising came after BP's credit rating was cut by the three major credit rating agencies due to fears over the total cost of the oil spill – a move that could cause its borrowing costs to soar.