THE City of London Corporation has unwittingly gone to war with BP, one of the bluest of blue-chip companies.

The Corporation’s £420 million pension scheme has been attached to a lawsuit filed by lawyers in the United States who are claiming negligence by BP’s board.

However, until yesterday afternoon the City of London Corporation, which is the local government authority covering London’s financial centre, was unaware of its involvement.

The Corporation’s pension fund, which holds £20 million- worth of BP shares, is managed by ABN AMRO Mellon. It is the fund manager that is backing the lawsuit.

A Corporation spokesman said: “As a matter of practice, the City of London would not expect to initiate actions against companies in which it holds shares, and we have not initiated this action against BP.

“However, the standing instruction we have with our global custodian, ABN AMRO Mellon, is that if it judges a class action to have merit and a reasonable prospect of success, we will allow our name to be attached to that action. It is our role as trustee to act at all times in the best interest of the pension fund.”

ABN AMRO was unavailable for comment yesterday.

The lawsuit was filed by Lerach Coughlin Stoia Geller Rudman & Robbins last week on behalf of Unite Here National Retirement Fund, which covers workers in the hotel sector. At least one private investor is also thought to have joined the action.

The suit claims that BP’s directors were negligent in handling safety and environmental processes at the Prudhoe Bay oilfield in Alaska. It is seeking hundreds of millions of dollars in compensation for shareholders. BP was forced to close half the Prudhoe Bay oilfield, the largest in North America, in August after concerns about rusting pipelines. A spill from one of its corroded pipes dumped 200,000 gallons of oil in March.

A partner from the San Diego-based law firm is said to have been in London last week trying to drum up more support for its action.

It is rare for British pension funds to take legal action against the companies in which they invest, but American lawyers are increasingly identifying London as a potential new market for aggrieved investors. Some UK-based companies have expressed concern to The Times that these lawyers are trying to export their no-win, no-fee system to Britain.

BP has a market capitalisation of more than £113 billion and is the largest company operating out of the UK. A spokesman declined to comment yesterday, saying only: “We do not talk about pending litigation.”

The company has had a torrid year as authorities in the United States grill it over the failures that led to the Prudhoe shutdown. Accusations have been made that BP took shortcuts in maintaining the Alaskan pipelines, a claim that BP rejects.

Lord Browne of Madingley, the chief executive, has also been ordered to testify in a lawsuit brought by victims of an explosion at BP’s Texas City refinery in 2005, in which 15 people died.

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