BP is now inspecting its entire network of pipelines at Prudhoe

The shutdown at the site is expected to cost Alaska $6.4m (�3.4m) a day in tax revenues and this has prompted a government state-wide hiring freeze.

The closure followed "numerous" satisfactory maintenance reports from BP, governor Frank Murkowski said.

He said BP would be "held responsible" for its earlier management of the site.

"BP must get the entire Prudhoe Bay field back up and running as soon as is safely possible," he said.

Indefinite shutdown

The oilfield accounts for 8% of US domestic production, producing 400,000 barrels a day.

The indefinite shutdown of the oilfield comes at a time when oil markets are already jittery, with the conflict in Lebanon keeping prices close to record highs.

We want to be the gold standard of safety, operations and integrity Dave MacDowell , BP spokesman Check BP's share price

The price of Brent crude oil, which hit a new high of $78.64 after news of the leak, was trading at $77.48 early on Thursday.

US light, sweet crude oil was trading at $76.46 a barrel on Thursday - slightly below its price on Monday.

Reacting to Mr Murkowski's comments, a BP spokesman said: "We want to be the gold standard of safety, operations and integrity."

The oil giant has said it will replace 16 miles of pipeline at the site after corrosion was discovered on an oil transit line.

This followed a small spill from the pipeline on Sunday in which an estimated four to five barrels were lost.

BP is already facing a criminal investigation after a leak from a stretch of pipeline on the site earlier this year resulted in the loss of 267,000 gallons of oil.