The latest drop comes amid fears of damage to the UK's reputation in the US. The oil company has come under increasingly sharp attack by US politicians, as congressional mid-term elections loom in November. US interior secretary Ken Salazar said that BP should compensate other oil companies that have had to lay off workers because of a moratorium on deep sea drilling announced by President Obama in response to the Gulf of Mexico spill.

Meanwhile, associate attorney general Thomas Perelli told a congressional hearing that the Justice Department was planning to take action to force BP to withhold its next dividend payment. The drop in BP's share price is already bad news for UK pension funds, which invest heavily in the firm. The oil company has said that it pays 1 pound in every 7 pounds of dividends that pension funds receive from FTSE 100 companies.

London mayor Boris Johnson said, "I do think there's something slightly worrying about the anti-British rhetoric that seems to be permeating from America. I do think that it starts to become a matter of national concern if a great British company is being continually beaten up on the international airwaves. I would like to see a bit of cool heads and a bit of calm reflection about how to deal with this problem rather than endlessly buck passing and name calling."

Sir Christopher Meyer, former ambassador to the US, told the BBC that the bashing of the company had reached an unacceptable level. He added that the British government should be urging the US to back off, in the British national interest.

In today's crazed environment, it seems like just about anything can set off a major panic. In fact, these days politicians have to be extremely careful about what they say about their national finances, because saying the wrong thing can literally send world markets into violent convulsions. For instance, when a senior Hungarian official said that the Hungarian economy was in a "very grave situation" last week it sent world financial markets into a tailspin.

Panic was everywhere and everyone was talking about how Hungary could be the "next Greece". Of course on Monday Hungarian officials backed away from that comment and tried to reassure world markets that everything was fine, but the damage had been done. It was a perfect example of the spirit of irrational fear that has gripped the financial world. After all, even if Hungary did fall apart financially, it wouldn't plunge the rest of the world into a depression.

And the truth is that Hungary is not really in that bad shape financially. Hungary's budget deficit is about half the size of the Greek budget deficit and Hungary doesn't even use the euro. But now investors all over the world are constantly scanning the news for the latest piece of information that will send waves of panic through the markets.

In the current environment, fear is what moves the markets.

He added, "Any treaty, even one that only applies to the euro area would have to be agreed by 27 countries, and Britain there has a veto, it is very important to make that clear." Speaking to the BBC Today programme a few days later, David Cameron then declined to specify whether a new eurozone Treaty, which did not affect the UK, would be put to a referendum, saying: "I think we're all getting slightly ahead of ourselves here. I mean, even the eurozone doesn't have any unanimity about whether there should be a treaty."

Although Germany has been calling for a Treaty change to bolster the eurozone and win back German confidence in its stability, its calls have been rebuffed by other countries.

Commission President Jose Manuel Barroso also engaged in a piece of rare public criticism of an EU leader, calling Angela Merkel "naive" for wanting to change the EU Treaties: "It would be naive to think one can reform the treaty only in areas Germany considers important. Then of course the British and others will come with their wishes. We will not propose treaty modifications even though we are open to good ideas."

Terje Riis-Johansen, Norway's oil minister said: "What is happening in the Gulf of Mexico is so unique, it's gone on for such a long time, the blow-out is so big, we must gather enough information from it before we move on."

The move will pile pressure on the British Government to put the North Sea oil industry under more scrutiny. Charles Hendry, Britain's new energy minister, said he wanted deep drilling due to start off the Shetland Islands to go ahead, despite concerns about industry safety standards.

He said yesterday that it was sufficient to increase inspections of rigs and set up a new industry body to probe safety, as new deepwater exploration gets underway. Shares tumbled across the oil and energy services sector yesterday, amid unconfirmed reports of another Gulf of Mexico leak at a rig operated by Diamond Offshore and a fresh onslaught on BP by Mr Obama.

The dramatic expansion in the use of special forces, which in their global span go far beyond the covert missions authorized by George W Bush, reflects how aggressively the President is pursuing al-Qaeda behind his public rhetoric of global engagement and diplomacy.

When Mr Obama took office US special forces were operating in fewer than 60 countries. In the past 18 months he has ordered a big expansion in Yemen and the Horn of Africa - known areas of strong al-Qaeda activity - and elsewhere in the Middle East, central Asia and Africa. According to The Washington Post, Mr Obama has also approved pre-emptive special forces strikes to disrupt terror plots, and has given the units powers and authority that was not granted by Mr Bush when he occupied the White House.

People like Brian Coulton aren't exactly the most popular figures in the financial industry these days. Politicians, in particular, aren't particularly keen on him and his ilk. Coulton, the European chief analyst for the ratings agency Fitch, was largely responsible for the downgrading of Spain's credit rating late last month. It was a move that once again sent stocks tumbling in New York and the euro down against the dollar.

Coulton doesn't accept any of the blame. "We performed our assessment, and that's it," he said tersely. The reason for the downgrade, he added, is concern that the austerity program announced by Spanish Prime Minister Jose Luis Rodriguez Zapatero on the previous Thursday would throttle economic growth. He declined to comment further.

In the midst of the euro crisis, the highly indebted countries are embroiled in a grotesque dilemma. The rating agencies will punish them if they don't get their gigantic mountains of debt under control. But the same agencies will also downgrade them if the governments impose austerity programs to reduce their debts.

The effect means that governments have to pay more to borrow money. Spain, for example, will be facing much higher interest rates now when it seeks to refinance 16 billion euros worth of bonds which mature in July. The higher interest rates, in turn, makes borrowing riskier and makes the country more vulnerable to further downgrades, which in turn leads to even higher yields - the beginning of a vicious cycle.

The scientists are now referring to the site as "Ground Zero." They have spotted oddly shaped "pancakes of oil" floating on the surface there - Samantha Joye, a professor of marine sciences at the University of Georgia reports - as well as "bizarre orange and black stringers, as deep in the water column as you could see."

The discoveries have added a new dimension to the fight to contain the oil spill. While thousands of workers and volunteers are currently defending the coastlines of Louisiana, Mississippi, Alabama and Florida against the reddish-brown scourge, what could be a far greater ecological catastrophe is taking shape out in the ocean.

The oil is suspended in the water in tiny, barely visible droplets, which the scientists call "rosebuds." The emulsion develops directly at the well head, deep beneath the surface, says Griffitt. When the hot oil shoots out of the ocean floor and comes into contact with very cold water under high pressure, methane gas is released, which then atomizes the oil.

James Cowan, an oceanographer at Louisiana State University, recently got a first-hand look at the underwater oil spill when he lowered a robot with an attached camera to a depth of 150 meters, about 120 kilometers west of the accident site. "First we saw droplets of oil, but then we couldn't see anything at all," Cowan reports. The underwater oil soup was so thick that it clogged the camera lens and the robot's headlights.

Gold also hit an intraday record, surging to $1,252.10. In euro terms, the metal also hit a record of 1,042.94 euros ($1,242.87) in the London market, a gain of 2.5%. The metal has surged over worries about Europe's debt woes and the slumping value of the euro. Investors in metals and currency markets have been on alert for any sign that the world's central banks, and China in particular, are shifting reserves out of the euro and into gold.

Though central banks typically are coy about investment decisions, there have been signs lately that they might be shifting out of euros and into gold. Russia's central bank, one of the world's largest holders of foreign-currency reserves, trimmed its currency reserves by $6.6 billion in May, according to data on the bank's website, but increased its gold reserves by $1.8 billion.

"You won't see major players be blatant about increasing their gold exposure and reducing their euro exposure, but it is a trend we've been witnessing in the past few months," said Kathy Lien, director of currency research at GFT Forex in New York. "For the most part, whether they openly admit it or not, central banks are increasingly worried about their exposure to euros."

While the leak is decidedly smaller than the Deepwater Horizon spill, a 10-mile-long slick emanating from the Ocean Saratoga is visible from space in multiple images gathered by Skytruth.org, which monitors environmental problems using satellites. Federal officials did not immediately respond when asked about the size of the leak, how long it had been flowing, or whether it was possible to plug it. The rig was damaged during Hurricane Ivan in 2004, and Taylor Energy has been working to fix it since then.

Skytruth first reported the leak on its website on May 15. Federal officials mentioned it in the May 1 trajectory map for the Deepwater Horizon spill, stating that oil from the Ocean Saratoga spill might also be washing ashore in Louisiana. Officials at the National Response Center said that the spill had been reported, but would not say when it began. The US Coast Guard did not immediately respond to e-mails seeking comment.

"We accidentally discovered this spill looking at the Deepwater Horizon images. The question is, what would we see if we were systematically looking at the offshore industry?" said John Amos with Skytruth.org. "Is this an aberration, or are things like this going on all the time?

"The president's economic experts say a 1 percent increase in GDP can create almost 1 million jobs, and that 1 percent is what experts think we are losing because of the debt's massive drag on our economy," said Republican Representative Dave Camp, who publicized the report.

He was referring to recent testimony by University of Maryland Professor Carmen Reinhart to the bipartisan fiscal commission, which was created by President Barack Obama to recommend ways to reduce the deficit, which said debt topping 90 percent of GDP could slow economic growth.

The US debt has grown rapidly with the economic downturn and government spending for the Wall Street bailout, the wars in Afghanistan and Iraq and the economic stimulus. The rising debt is contributing to voter unrest ahead of the November congressional elections in which Republicans hope to regain control of Congress.

The total US debt includes obligations to the Social Security retirement program and other government trust funds. The amount of debt held by investors, which include China and other countries as well as individuals and pension funds, will rise to an estimated $9.1 trillion this year from $7.5 trillion last year.

"Just 50 years ago, in the 1950s, America was a great place," writes author William Lind in the issue, titled 'STEALTH ATTACK.' "It was safe. It was decent. Children got good educations in the public schools. Even blue-collar fathers brought home middle-class incomes, so moms could stay home with the kids. Television shows reflected sound, traditional values. Where did it all go? How did that America become the sleazy, decadent place we live in today - so different that those who grew up prior to the '60s feel like it's a foreign country? Did it just 'happen'?"

"It didn't just 'happen,'" Lind explains. "In fact, a deliberate agenda was followed to steal our culture and leave a new and very different one in its place. The story of how and why is one of the most important parts of our nation's history - and it is a story almost no one knows. The people behind it wanted it that way."

Indeed, today in the age of Obama, millions of Americans are "waking up" to the stealth infiltration and subversion of their beloved country and are appalled at what they see: Not only is their government in the hands of the left, but virtually all of our nation's major institutions - from the public education system to our colleges and universities, from the news media to the entertainment industry, from the unions to our major philanthropic foundations, even many of our churches - have also been captivated by this same destructive ideology.

"Here's the hard truth," said Whistleblower Editor David Kupelian. "The same 'ism' we fought to contain overseas - whether you call it Marxism, socialism, or progressivism - has been slowly infiltrating and subverting America for decades. The final piece of the puzzle - the federal government - fell into leftists' hands like a ripe piece of fruit in November 2008.

In the first major test of opinion in the City since the election, 25 leading economists said the eurozone in its current form would not survive beyond the end of the British coalition parliament in five years' time. Andrew Lilico, chief economist of the Policy Exchange think-tank, said there was 'nearly zero chance' of the euro surviving.

Douglas McWilliams, of the Centre for Economics and Business Research, said the euro 'may not even survive the next week'.

David Blanchflower, a former Bank of England policymaker, added: 'The political implications (of euro disintegration) are likely to be far-reaching - Germany are opposed to paying for others and may well quit.'

In the survey by the Sunday Telegraph, Tim Congdon of International Monetary Research, said: 'The eurozone will lose three or four members - Greece, Portugal, maybe Ireland - and could break up altogether because of the growing friction between France and Germany.'

The currency started the week by dropping to another new low against the dollar - falling below $1.19 for the first time since March 2006. In London, the FTSE 100 Index was down more than 1.6 per cent in early trade because of fears Europe's debt problems could spread. Markets continued to come under pressure after Friday's disappointing US job figures, which sent the Dow Jones Industrial Average on Wall Street down by 3 per cent .

The number of Muslim prisoners has risen dramatically since the mid-1990s - from 2,513 in 1994, or 5 per cent of the population, to 9,795 in 2008, or 11 per cent. Staff at top-security prisons and youth jails have raised concerns about the intimidation of non-Muslims and possible forced conversions. Dame Anne's report, Muslim Prisoners' Experiences, published today, says that, although several high-profile terrorists have been jailed recently, fewer than 1 in 100 Muslim inmates have been convicted of terrorism.

She says that prison staff are suspicious about those practising or converting to the faith and warns that treating Muslim inmates as potential or actual extremists risks radicalising them. The report says: "Many Muslim prisoners stressed the positive and rehabilitative role that Islam played in their lives, and the calm that religious observance could induce in a stressed prison environment. This was in marked contrast to the suspicion that religious observance, and particularly conversion or reversion, tended to produce among staff."

All prisons offer a halal menu, which some inmates see as better than the usual choices. Muslims are excused from work and education while attending Friday prayers. Some converts, who are known as "convenience Muslims", admitted that they had changed faith because they got more time out of the cells to go to Friday prayers. One quoted in the report said: "Food good too, initially this is what converted me."

As at least two international brokerages cut their recommendations on BP to "neutral", citing spiralling costs from the Gulf of Mexico oil spill and a potential cut to the dividend, Gazprom piled on the pressure by ending hopes that it might buy Kovytka from TNK-BP for up to $1 billion.

Speaking in Moscow, Viktor Timoshilov, the Gazprom executive responsible for Siberian developments, claimed that Russia's gas export monopoly had no need for access to Kovytka's resources because it had ample supplies elsewhere. Discovered in 1987, the Kovytka field in Irkutsk contains an estimated two trillion cubic metres of gas and has been earmarked as a key source of energy supplies for China. Since the mid-1990s it has been majority-owned by TNK-BP, which started limited development of the field in 2001.

However, in the interim Moscow identified Kovytka as a strategic field that could be developed only by a company with majority Russian ownership. As the Kremlin has increasingly flexed its muscles over the country's resources, state officials have repeatedly threatened to strip TNK-BP of its licence to develop Kovytka.

In 2007, TNK-BP struck a deal to sell the field to Gazprom for nearly $1 billion. But the talks subsequently ground to a halt. Decreased demand amid the global economic downturn plus a glut of gas supplies have undermined the rationale for developing new gas projects.

"Gold outperformed silver by 46 per cent over the three years to May 31 2010 and silver, given the long-term correlation between the two metals, is due a catch-up," the company said. "As gold becomes ever more expensive, investors will turn to silver as an alternative precious metal."

Rises in the price of gold and silver did not represent bubbles while confidence in Western currencies continued to deteriorate, the company said. "The euro is currently under pressure because of the debt crisis and sterling is next in line, before attention will finally turn to the US dollar. Western currencies will continue to be derated versus the currencies of non-indebted countries such as China and Brazil."

Mr Charlesworth said silver, which is trading at around $18-$19 an ounce, had an additional attribute over gold in that it is continually consumed for industrial purposes. He said: "Silver has lots of practical applications and is widely used for example in plasma screens, mobile phones and coins. I am more bullish on silver than gold in that when it moves it shifts very quickly and it is due a catch-up with gold."

He said gold, now trading at around $1,225 per ounce, was set to go much higher, "quite possibly in excess of $5,000", although the price was impossible to predict for certain. "The gold market really does have the bit between its teeth at the moment but a pullback in prices would only be a buying opportunity. It won't be until gold is going up by $150 a day that the bubble will burst," he said.