SHELL was last night forced to defend itself against allegations of a cover up and a lack of transparency concerning its oil reserves crisis.

The company has downgraded its oil and gas stocks four times since January in a debacle that led to the departure of three directors, including chairman Sir Philip Watts.

The task facing the company as it battles to restore confidence was underlined by ten per cent of investors voting against its remuneration package for directors.

Many voiced their disapproval of a £1m pay-off to Sir Philip after his role in overbooking oil and gas reserves.

Shareholders called the downgrades disgraceful, and a scandal, and asked why it took Shell so long to discover the problem.

Shell chairman Lord Oxburgh said there had been no cover up and action had been taken as swiftly as possible.

"When some of the senior directors are being economical with the information that they passed to the board, then it is very difficult that this could have come to light sooner," he said.

Shell has pledged to consider changes to its structure that could see its twin boards in London and The Hague merged.

Shareholders critisised the current structure of directors sitting separately in the two cities as antiquated and partly to blame for the reserves issue.

But the review has also drawn public criticism, notably from US investors Knight Vinke Asset Management and pension fund Calpers earlier this month.

In a letter to the Financial Times, they warned that Shell was in danger of losing its credibility by not being more open.