The regulator said claims that Cairn’s Rajasthan reserves had almost trebled to 3.5 billion barrels had not been proven, and that its own data revealed reserves of just 1.4 billion barrels.

The claims, made by Cairn chief executive Sir Bill Gammell last week in the company’s annual results, led to a 1.45% rise in its share price.

Gammell also announced plans to reward shareholders by listing its Indian exploration and production operation on the Bombay Stock Exchange. The flotation is expected to raise a £2 billion windfall for shareholders.

But Gammell’s announcement was last week challenged by V K Sibal, India’s director-general of hydrocarbons (DGH), who oversees the management of the country’s oilfields.

Sibal told The Sunday Times he had written to Cairn to complain that no evidence to support the claim had been submitted to or discussed with his officials.

Sibal said he was particularly surprised that Gammell had failed to disclose his announcement plans when the two met last week. In a letter to the firm’s Indian managing director, Sibal said the 3.5 billion barrel claim was a “matter of concern as these figures have not been validated by DGH. The basis of the information in the press release is not at all understood as DGH has not certified these figures.”

Sibal said: “These claims are not correct, I know that. All the data is with us. All data has to be logged, and I’ve seen the logs these claims are based on, the seismic data, the well tests.”

Cairn Energy said the company was bound to disclose all potentially price sensitive information to the London Stock Exchange first.

Cairn is developing four fields in Rajasthan, but has 17 fields in total. A spokesman said an evaluation by the respected independent reservoir engineers DeGolyer and McNaughton estimated 3.5 billion barrels underground in Cairn’s 17 fields.

A spokesman said the Indian regulator was “comparing apples and pears.”

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