ONE of Britain’s biggest companies has been accused of failing to disclose crucial information to the government as it sought to secure loans worth more than £1 billion to finance a key construction project.

BP, the petrochemical giant, is alleged to have been aware of safety design faults that could have jeopardised the funding.

The disclosure — revealed in leaked documents to The Sunday Times — will embarrass BP, which prides itself on its closeness to Tony Blair.

Allegations of suspected corruption, mismanagement and incompetence were all covered up as BP fought a propaganda war against environmental campaigners lobbying for public backing to be withdrawn.

At stake was one of the world’s most ambitious pipelines, which is intended to reduce the West’s dependence on oil from volatile regimes. BP leads the Baku-Tblisi-Ceyhan (BTC) consortium building the pipeline.

Environmental groups say the pipeline, which runs for 1,000 miles underground from the Azerbaijan capital Baku, through the Caucasus mountains to Ceyhan on Turkey’s Mediterranean coast, will cause an ecological catastrophe if it leaks. But the British government has given assurances that the pipeline had undergone “rigorous assessment” and is safe.

It is understood, however, that ministers were unaware of a report by a leading expert hired by BP who discovered “serious flaws” in the pipeline’s design, which would make it highly likely to leak.

Derek Mortimore, a world- renowned pipeline consultant, was called in by BP managers in Azerbaijan to assess a key material used to seal the pipe’s estimated 50,000 joints: its paint coating.

The paint plays a vital role in protecting the joints from corrosion. Unusually, however, for such a large project, BP had opted for an untried coating from SPC, a Canadian company. Mortimore, a consultant to BP for more than 30 years, was shocked at what he found.

“We are completely out on a limb,” his report to BP warned. “Clearly the use of (this paint) is going to lead to a serious problem. (In the event of cracks appearing) the cost for repairs could be astronomical. The potential for claims against (BP) is open-ended.

“I have witnessed many failures in specifications . . . but the situation on the pipeline is unique in my 41 years’ experience. There is no question in my own and many other people’s minds that the wrong system has been chosen through a seriously flawed selection programme.”

His fears were realised in November last year when construction was halted after cracks were discovered in the joint coating before burial. An estimated 15,000 joints have already been buried in Azerbaijan and Georgia. Work was suspended on the pipeline until last week.

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