The continuing presence of reputable companies in Burma is encouraging the regime to flout international opinion

UK Foreign Office

A Foreign Office minister, John Battle, said this was the first time he had intervened with a British firm in this way, but it was justified by the Burmese government's record on human rights, which he described as one of the worst in the world.

He revealed that he had summoned Charles Jamieson, Premier's chief executive, two weeks ago to put the government's position to him.

Tough line

"I set out our position in a way which could not be misunderstood," Mr Battle said on Tuesday. "I really expect Premier to do the decent thing without having to resort to legal pressure."

But he admitted the UK Government had no power to compel the company to leave Burma and said it did not want to place the company under commercial pressure, or force it to break contracts.

Mr Jamieson questioned whether disinvestment would have any effect on the Burmese authorities.

Talking to people is more likely to make progress

Charles Jamieson, chief executive, Premier Oil

"Isolation has been Burma's lot since 1962 when Ne Win took power without any startling results. Talking to people is more likely to make progress," the Times quoted him as saying.

The biggest British investor in Burma, Premier has a stake believed to be worth some $200m in a project to pipe gas to Thailand from Burma's vast Yetagun offshore field.

Opposition

Premier's partners include Petronas, Malaysia's state oil and gas company, and PTT, the Thai power company. The US company, Texaco, sold its interest in Yetagun two years ago after President Bill Clinton banned new investment in the country.

Aung San Suu Kyi, the Burmese opposition leader whose National League for Democracy won a huge victory in 1990 national elections, has repeatedly urged the international community not to invest in the country or supply aid while the military remains in power.

The military ignored the result of the 1990 elections and detained many of the party's members.