BP chief Bob Dudley vowed to dig in for a long-haul legal battle today as the company fights "absurd" compensation claims worth more than a billion US dollars in the wake of the Deepwater Horizon oil disaster.

Mr Dudley said he would stand up for shareholders against a flood of litigation after the company admitted that a vast trust fund it had set up to cover the bill was about to run out, leaving profits under pressure.

He would not rule out taking the case to the US Supreme Court and said BP would go after companies that were found to have been wrongly given pay-outs.

Mr Dudley said: "We are fighting this aggressively because we have a duty to our shareholders, but also because it's simply the right and principled thing to do.

"No company would agree to a settlement that pays businesses that suffered no losses.

"As we continue to fight these absurd outcomes, we want everyone to know that we are digging in and are well-prepared for the long haul on legal matters."

The British oil giant said it had put aside an extra 1.4 billion US dollars (£913 million) in compensation for individuals and businesses affected by the 2010 catastrophe, as it announced second quarter results for this year.

It admitted that during the current, third quarter the remaining 300 million US dollars (£196 million) in the trust would be fully used up, leaving additional amounts to be "charged to the income statement". Shares were down up to 5%.

The amount set aside for compensation payments has now risen from an original figure of 7.8 billion US dollars (£5.1 billion), to 8.2 billion US dollars (£5.3 billion), and now 9.6 billion US dollars (£6.3 billion).

BP's total estimated bill following the disaster stands at 42.4 billion US dollars (£27.7 billion) - a sum which takes into account clean-up costs and fines.

The blow-out of the Deepwater Horizon well off the Louisiana coast in 2010 claimed 11 lives and damaged fishing and tourism as well as marine and wildlife habitats, forcing the company to sign a multi-billion compensation deal in April 2012.

But it is now aggressively challenging the way claims are being handled by a court-appointed administrator and judge.

BP's complaint centres on the way businesses are allowed to compare earnings before and after the spill in favourable ways which appear to inflate losses.

It has cited one example of a 9.7 million US dollar (£6.4 million) pay-out to a construction company based 200 miles off the coast of Alabama, even though 2010 was its best year in record.

Brian Gilvary, BP's chief financial officer, said there were "in excess of a billion dollars (£650 million) of claims we believe that are not legitimate".

He said the company was also concerned that administration costs alone had now risen to 1.5 billion US dollars (£980 million).

BP argues that the terms of the settlement have been misinterpreted. Mr Dudley said it had resulted in claims for "fictitious or inflated losses".

Some of the biggest beneficiaries in the US had been law firms representing claimants, many of which had submitted multimillion-dollar bills in the last week.

Mr Dudley said it was the biggest example of a class-action industry that was "out of control" and in need of reform.

But he declined to express regret over making the agreement, saying the company "did the right thing".

It has taken its dispute over the claims to the US appeals court and expects a ruling in the next few months. BP made clear it was determined to recover major pay-outs found to have been wrongly made to those who did not suffer losses.

Mr Dudley said: "I don't think BP has any intention of going after the little guy - small businesses who might have received claims. It will go after, very vigorously, the large claims."

A separate US trial to decide on a fine over the accident will enter its final phase next month.

Mr Dudley said BP had always been open to a "fair and reasonable" settlement but that talks about such an outcome were now "highly unlikely".

Hinting that this had been made less likely by the outcome of its compensation agreement, he said the company would not make settlement when "we don't know how it's going to be administered".

He stressed the significance of the settlement dispute for British people with interests in the company. Many UK pension funds have large investments in the firm.

"BP's shareholders and dividends from this company are so important here, everyone should be unhappy, just as they should be in the US."

Meanwhile, the company's quarterly results showed it made profits of 2.7 billion US dollars (£1.8 billion) in the second quarter. The 25% decline compared to the same period last year was blamed on lower oil prices and a higher tax bill.