BP has agreed to settle claims from thousands of fishermen who lost work and others who said they were harmed by the oil giant's 2010 Gulf of Mexico disaster, the worst offshore oil spill in US history.
The company said it expected to pay out at least 7.8 billion dollars (£4.9 billion) as part of the settlement. It said it expects the money to come from the 20 billion-dollar (£12.6 billion) compensation fund that it previously set out.
BP still has to resolve claims by the US government, Gulf states and its partners in the doomed Deepwater Horizon project, in which pressure from a well a mile below the ocean's surface blew up a massive drilling rig, killing 11 men and spewing oil into the sea for nearly three months.
The momentous settlement will have no cap to compensate the plaintiffs, though BP's £4.9 billion estimate makes it one of the largest class-action settlements. After the Exxon Valdez disaster in 1989, the company ultimately settled with the US government for one billion dollars, which would be about 1.8 billion (£1.1 billion) today.
The April 2010 spill exposed oil industry failings, forced BP chief executive Tony Hayward to step down after his repeated gaffes and led to new lexicon in American vocabulary as crews used innovative attempts to plug the spewing well, such as the "top kill" and the "junk shot".
The Gulf of Mexico spill soiled sensitive tidal estuaries and beaches, killing wildlife and shutting vast areas to commercial fishing. After several attempts to cap the well failed, engineers were finally successful on July 15, halting the flow of oil into the Gulf after more than 85 days.
The main targets of litigation resulting from the explosion and spill were BP, Transocean, Halliburton and Cameron International, maker of the well's failed blowout preventer. BP, the majority owner of the well that blew out, was leasing the rig from Transocean.
The US Justice Department sued some of the companies involved in the ill-fated drilling project, seeking to recover billions of dollars for economic and environmental damage. The department opened a separate criminal investigation, but that probe has not resulted in any charges. The companies also sued each other, although some of those cases were settled last year. In one of the pending lawsuits, BP has sued Transocean for at least 40 billion dollars (£25.3 billion) in damages.
As a result of the settlement that will be filed with the court for approval, the trial that was scheduled to begin on Monday has been postponed for a second time. No new date was immediately set.
BP has repeatedly said it accepts some responsibility for the spill and will pay what it owes, while urging other companies to pay their share.