BP is now replacing 16 miles of Alaskan pipeline

The allegation in the Financial Times is the latest twist to BP's woes at its Prudhoe Bay field in Alaska, which has been partially shut after a small leak.

In another development, Alaska's attorney general has told BP to hand over all data on corrosion management.

Prudhoe Bay is the largest oil field in the United States.

It usually produces 400,000 barrels of crude oil each day, but is currently down to about 220,000 barrels.

Legal action

A BP spokesman said there was no truth to the latest newspaper reports, and that the company is continuing to help US authorities with their investigations.

BP says it only discovered "unexpectedly severe corrosion" on its Alaskan pipelines after regulators asked it to carry out major monitoring tests in March.

Alaska's governor, Frank Murkowski, has already accused BP of misleading regulators over the condition of its pipelines, and some BP shareholders have started legal action, accusing the firm of hiding the problems.

BP denies all the allegations.

The firm announced earlier this month that it was cutting production at Prudhoe Bay in order to replace 16 miles of corroded pipeline at a cost of about $170m (�89m).

It had previously considered a full closure of the field.