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UPDATE 3-Under pressure over BP, Cameron says UK ready to help

* British prime minister will discuss BP crisis with Obama

* Cameron under pressure at home to defend oil giant

* BP woes have big impact in UK but little Cameron can do

(Adds quotes, details)

By Adrian Croft and Estelle Shirbon

KABUL/LONDON, June 10 (Reuters) - Britain stands ready to help BP deal with the impact of the Gulf of Mexico oil spill, Prime Minister David Cameron said on Thursday as he came under intense pressure at home to stand up for the oil giant.

In his first public comments about the crisis, Cameron said he would raise it with U.S. President Barack Obama when they speak in the next few days. That will be a delicate balancing act between upholding British interests and nurturing a key diplomatic relationship.

“This is an environmental catastrophe. BP needs to do everything it can to deal with the situation and the UK government stands ready to help ... I completely understand the U.S. government’s frustration,” Cameron said during a visit to Afghanistan.

Officials in London said Cameron and Obama would speak by phone over the weekend. They last spoke directly on May 11, when Obama was the first world leader to call Cameron to congratulate him just after he became prime minister.

The crisis surrounding BP BP.LBP.N [nN09136035] after a rig exploded and sank in the Gulf of Mexico in April, killing 11 workers and causing the biggest U.S. environmental disaster, is fast turning into Cameron's first major foreign policy headache.

The plunge in BP’s share price, which dropped 6.7 percent in London on Thursday, has hit British investors hard, while U.S. demands that the company not pay dividends could result in a huge shortfall for UK pension funds. BP accounts for 12-13 percent of dividend payouts in Britain.

British business and shareholder groups, alarmed that Obama’s attacks could worsen BP’s problems and fuel a backlash against other British businesses in the United States, are also clamouring for Cameron to defend the company. [nLDE6590W]

But with Obama under pressure from his own electorate to be tough on BP and mid-term elections coming up, there is little Cameron can do to influence events unfolding in Washington.


“This is his first test of high-level diplomacy where British interests need firm representation and he’s been found wanting,” said the Evening Standard newspaper in an editorial that reflected an increasingly strident tone in British media.

The Standard, a London newspaper normally broadly supportive of Cameron’s Conservatives, accused Obama of “masking his own failure to react quickly” to the spill by whipping up sentiment against BP.

“Shame too, on the British government, which has not tried to defend BP or counter Mr Obama’s jingoism,” it said.

BP was once a predominantly British company but now has global operations and a major presence in the United States. Around 40 percent of its shareholder base is in the UK and a similar proportion is drawn from the United States. Even members of Cameron’s own Conservative Party have spoken out, with London Mayor Boris Johnson calling for “cool heads” and an end to “buck-passing and name-calling” by Washington.

“I think a gentle message to President Obama, which would be ‘Grow up and consider the best interests of your country instead of grandstanding’ might be in order,” veteran Conservative politician Norman Tebbit told BBC television.

But the so-called “special relationship” between London and Washington is Britain’s most important international tie and Cameron will be wary of stoking tensions with a crucial ally so early in his tenure.

So far, his comments and those of other British officials have been extremely guarded and sympathetic towards U.S. anger, suggesting that London has no appetite for a confrontation.

“They’ve got too many things to be working on bilaterally, from Afghanistan to Iran, for the next four or five years,” said Robin Niblett, director of Chatham House think-tank in London.

“What is said privately is different. I would be surprised if British officials were not communicating privately their concern that this could get out of hand,” he told Reuters. (Additional reporting by Tim Castle in London; writing by Estelle Shirbon; Editing by Charles Dick)