BP has set up a “snitch line” to reward people who inform the oil giant about fraudulent claims related to 2010’s massive Deepwater Horizon oil spill.

The hotline promises that “tips that lead directly to an indictment, a recovery of money paid, or the denial of a claim because of fraud or corruption may entitle the reporter to a reward”.

The move comes after BP appealed to a New Orleans court to reassess the terms of its compensation deal with local businesses, claiming it is being forced to pay hundreds of millions of dollars in inflated or fictitious settlements.

Following the fatal explosion of the Deepwater Horizon oil rig, BP moved swiftly to set up a compensation scheme that it originally estimated would cost the company $7.8bn. Patrick Juneau, the compensation scheme’s administrator, has offered payouts worth more than half that $7.8bn. Less than a quarter of claims have been settled, and new cases are arriving at a rate of 10,000 per month.

The company originally made payments from the $20bn Gulf Coast Claims Facility (GCCF) set up by former chief executive Tony Hayward after a meeting with President Barack Obama in June 2010. Compensation was moved to the court-supervised settlement programme (CSSP) in 2012.

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