The BBC has been tricked into broadcasting a false report that the US company Dow Chemical admitted blame for the Bhopal disaster and set up a massive compensation fund.

BBC World news channel twice screened an interview this morning with a man claiming to be from Dow Chemical but the broadcaster later said it was an "elaborate deception."

The hoax coincides with today's 20th anniversary of the disaster, when the Union Carbide plant in Bhopal unleashed 40 tonnes of lethal gas, killing more than 3,500 in one of the world's worst environmental disasters.

Dow Chemical, which took over Union Carbide in 2001, insisted that all liabilities regarding the leak of methyl isocyanate gas have been settled with the Indian government.

The hoax started when a man claiming to be a spokesman for Dow, who called himself Jude Finisterra, told the BBC that the company would start a $12 billion fund "to finally at long last fully compensate the victims including the 120,000 who may need medical care for their entire lives."

The man, who later identified himself to the BBC as an activist with the group Yes Men, also said that Dow Chemical would "liquidate Union Carbide, this nightmare for the world."

Dow shares dropped by 3.4 per cent to 37 euros in Frankfurt. A Dow Chemical spokeswoman in Switzerland confirmed the BBC report was wrong and the BBC apologised in subsequent news bulletins for the "elaborate hoax."

The hoaxer said later that the Yes Men, which has a history of tricking governments and big businesses, would strike again. He said: "I was speaking on behalf of Dow in a certain way. I was expressing what they should express.

"I have enough connection with Dow as everybody else on the planet. I use many of their products."

A similar hoax by the Yes Men was staged two years ago, when it created a false internet site on which the Dow Chemical boss supposedly defended the company's stance on Bhopal.

Rachna Dhingra, an activist from the International Campaign for Justice in Bhopal and one of thousands of protestors marking the anniversary in the city, said: "It is a cruel, cruel hoax to play on the people of Bhopal on the 20th anniversary of this tragedy."

Survivors of the pesticide plant tragedy staged a series of angry protests and a march while activists renewed their calls for medical care and financial compensation.

Local government officials paid tribute to victims of the disaster, laying flowers at an impromptu memorial and observing a few moments silence before attending a prayer meeting.

At Bhopal's main Shahjahani park, an exhibition of photographs that showed streets lined with the corpses and dead families drew large crowds.

Manish Vishwakarma, a 19-year-old student, said: "These pictures bring to life what we have heard all along - the terror and chaos of that night,"

In another part of Bhopal about 250 victims and activists marched three miles to the now derelict Union Carbide plant to burn some 15 effigies depicting Union Carbide, Dow Chemicals and the Indian Government. Protestors also chanted slogans against Warren Anderson, the then chief of Union Carbide who fled India to escape justice.

The daytime ceremonies followed a midnight vigil in which hundreds of survivors and relatives revisited the plant site to light candles in memory of at least 15,000 people who, according to Indian government records, died as a result of the gas.

Amnesty International said this week the tragedy and resulting illnesses like cancer had claimed 22,000 to 25,000 lives. Victims' rights activists put the figure as high as 30,000.

Dow says all liabilities were settled when Union Carbide paid a $470-million settlement - but protesters claim only part of that has reached victims.

The company says it has no responsibility for cleaning up the site or for any toxins still leaching into the ground, but the Indian government is awaiting the decision in a US court that could ask Dow Chemicals to clean the site up further.

Many surviving residents of the slums that surrounded the plant suffer from cancer, tuberculosis, poor eyesight, gynaecological problems, poor breathing and other health issues.

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