By Keith Weir and Jeffrey Jones
LONDON/VENICE, Louisiana (Reuters) - Britain stuck up for beleaguered BP <:BP.LO:>on Friday against American criticism over the massive Gulf of Mexico oil spill, while investors appeared to shrug off news that the disaster was worse than previously estimated.
Prime Minister David Cameron and Chancellor George Osborne stressed the London-based company was economically important to both Britain and the United States.
Britain's backing helped to boost BP shares, which have taken a battering this week as the Obama administration ratcheted up criticism of the company over the 53-day-old spill, the worst environmental disaster in U.S. history.
Millions of gallons of oil have gushed into the Gulf since an April 20 explosion on an offshore rig killed 11 workers and ruptured a deep-sea well. U.S. scientists on Thursday doubled their estimate of the amount of oil flowing from the well. (See a graphic on spill rate at http://link.reuters.com/maj68k)
Obama administration officials have threatened to increase BP's liabilities for the spill, which is causing an ecological and economic disaster along the U.S. Gulf Coast. U.S. lawmakers are also pressuring the company to suspend its dividend to ensure it has enough cash to pay for cleaning up the mess.
U.S. House of Representatives Speaker Nancy Pelosi said on Friday BP should be subjected to unlimited liability costs and should pay all damage claims before issuing the dividend.
BP is considering putting money for the dividend in an escrow account until the full scale of the company's liabilities can be determined, the Times of London reported, quoting people familiar with the situation.
It said BP board members were discussing a plan to defer the second quarter dividend, due to be announced on July 27. A BP spokesman told Reuters the company was considering all options but no decision had been made.
BP said it was collecting more oil from its blown-out well, while the Obama administration's point man for the crisis, Coast Guard Admiral Thad Allen, said the company hoped to double its collection efforts to 40,000-50,000 barrels a day by mid-July. (See a graphic on cap system at http://link.reuters.com/hud49k)
However, the leaking well will not be sealed until August, when a relief well now being drilled is due to be completed. Even with the new U.S. government estimates of the oil flow rate, it is still not known exactly how much oil is gushing out.
U.S. Energy Secretary Steven Chu told Reuters in an interview that BP's latest effort to capture the oil leaking from the well had not made the spill dramatically worse, dispelling fears of government scientists that it could increase the flow of crude by up to 20 percent.
"The estimates of 20 percent or more are incorrect," Chu said, adding that the U.S. government is confident in its estimates of a 4 to 5 percent flow increase since the operation began last week.
Prime Minister Cameron, on his way home from Afghanistan, spoke to BP Chairman Carl-Henric Svanberg and expressed frustration about the environmental damage caused by the spill, a spokesman for Cameron said.
"He (the prime minister) said that it is in everyone's interests that BP continues to be a financially strong and stable company," the spokesman said.
'ECONOMIC VALUE'
Osborne, chancellor of the exchequer, said after speaking to BP CEO Tony Hayward, "The prime minister is also clear that we need constructive solutions and that we remember the economic value BP brings to people in Britain and America."
Forty percent of BP's shareholders are in the United States, with the same percentage based in Britain.
Business leaders, politicians and newspapers have pressed Cameron to defend BP against the Obama administration, whose criticism of the British company has been portrayed in British media as Britain-bashing.
Cameron, who took office in May, is due to discuss the Gulf of Mexico crisis in a telephone call with Obama on Saturday.
The call will be a tricky test for the two leaders. Both are under pressure to appear tough to voters at home.
Obama, criticized by some in the United States over his handling of the crisis, has been seeking to direct public anger and frustration over the spill towards BP.
For his part, Cameron must show Britons that he is not caving in to pressure from his country's most powerful ally and is standing up for British interests.
A spokeswoman for Cameron said the prime minister's telephone call with Obama would be "statesmanlike and workmanlike." A White House official tried to play down the focus on BP, saying it would be just one of a number of issues the two leaders would talk about.
BP STOCK
Shares in BP, which has lost tens of billions of dollars in value since the crisis began on April 20, closed up 7.2 percent in London trading, rebounding from Thursday's 13-year low and extending a rally that began in New York on Thursday.
BP's American depositary shares rose about 2.7 percent in afternoon trading in New York on Friday.
"Possibly people have taken heart from the fact that the political rhetoric is not just one side of the Atlantic," said Barclays Capital analyst Lucy Haskins.
Investors appeared unfazed by the news from U.S. scientists that the well's flow rate may be as high 40,000 barrels (1.68 million gallons/6.36 million litres) per day.
The new estimates could have huge financial implications because under the U.S. Clean Water Act, BP and others could face fines up to $4,300 (2,960 pounds) for every barrel leaked.
With more than 2 million barrels of oil already in the ocean, that could means fines of $8.6 billion (5.9 billion pounds) at least.
BP expects the total bill for the clean-up of the spill, which has affected 120 miles (190 km) of U.S. coastline and closed down rich fishing grounds, will be $3-$6 billion, an analyst briefed by BP said in a research note on Friday.
On top of the bill for capping the well and cleaning up the environmental damage, BP has also committed to paying damages to those affected by the spill, which Credit Suisse investment bank estimates will amount to additional $14 billion.
The slick has already fouled wildlife refuges in Louisiana and barrier islands in Mississippi and Alabama. Tar balls have also washed up on Florida's famous white beaches. One third of the Gulf's federal waters remain closed for fishing.
In Venice, Louisiana, locals connected with the commercial fishing industry said they had long suspected the reported flow rate from the oil well was being low-balled.
"BP and all involved have downplayed this from day one. Everyone knew it was more than they reported and now basically it's been proven," said Kindra Arnesen, a Venice restaurant owner whose husband David makes his living fishing.
(Additional reporting by Eileen O'Grady, Timothy Gardner and Steve Holland and Tom Doggett in Washington, Tom Bergink Sarah Young and Estelle Shirbon, Keith Weir and Andrew Callus in London, and Chris Baltimore and Kristen Hays in Houston; Writing by Ross Colvin; Editing by Will Dunham)