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The 193-page BP report offered a preview of how the British oil giant plans to vigorously defend itself against lawsuits arising from the disaster and any charges of gross negligence, which carry fines potentially in excess of $20 billion.

BP accepted some responsibility for the disaster but pointed the finger at what it said were major failures by Transocean Ltd, the operator of the ill-fated Deepwater Horizon oil rig, and oil services company Halliburton, which cemented the deep-sea well that ruptured on April 20.

The report drew fire from a prominent U.S. lawmaker who accused BP of trying to minimize its role in the disaster. Transocean called it a "self-serving" attempt by BP to escape responsibility for its "fatally flawed" well design, while Halliburton said the report was filled with inaccuracies.

The report threatened to reignite public anger over the massive spill, which caused an environmental catastrophe along the U.S. Gulf Coast, devastated tourism and fishing in the area and damaged President Barack Obamas popularity.

Obamas spokesman, Robert Gibbs, declined to comment on BPs findings and said the government was still investigating the disaster to "find out what went wrong and hold those responsible accountable for the damage thats been done."

COMPLEX SERIES OF FAILURES

BP investigators were unable to identify any single action or inaction that caused the Deepwater Horizon rig to blow up on April 20, killing 11 workers, after the Macondo well ruptured.

"Rather, a complex and interlinked series of mechanical failures, human judgments, engineering design, operational implementation and team interfaces came together to allow the initiation and escalation of the accident," the report said.

"Multiple companies, work teams and circumstances were involved over time."

Investors had been eagerly awaiting the report to find out whether BP would be able to share the potential costs of the spill -- estimated by some analysts to exceed $50 billion.

Citigroup analysts said in a research note that BPs report "appears to support the case for no negligence," but they acknowledged that the findings of the internal investigation were unlikely to be accepted as objective.

BP shares trading in New York closed up 3.2 percent, while shares of Transocean were 1.3 percent higher and those of Halliburton were up 1.2 percent.

Standard & Poors downgraded Transoceans rating to BBB from BBB-plus, saying the Swiss-based company faced uncertain liabilities arising from the disaster.

The U.S. Justice Department could pursue a variety of civil and criminal charges against the companies involved in the spill. Any penalties could be in the billions of dollars.

The ruptured well unleashed a torrent of crude that spewed until it was capped three months later on July 15, after 4.9 million barrels of oil had leaked into the sea.

The top U.S. official overseeing the spill response, retired Coast Guard Admiral Thad Allen, said on Wednesday that BP may not start the final "kill" of its well until mid- to late September.

The BP report, overseen by BPs head of safety, Mark Bly, highlighted eight key failures that led to the blowout of the well and the subsequent explosion aboard the rig.

It defended BPs much-criticized single-casing well design; the use of fewer-than-recommended centralizers devices used to ensure the cement casing is applied evenly around the well; and the decision to replace heavy drilling mud, which was keeping the well under control, with lighter water.

"It would appear unlikely that the well design contributed to the incident," said BPs outgoing Chief Executive Tony Hayward, who has faced withering criticism from U.S. lawmakers for initially playing down the scale of the disaster.

"HAPPY TO SLICE UP BLAME"

BP, which has seen almost $70 billion wiped off its market value since April 20, is trying to rehabilitate its tarnished public image and restore investor confidence, spending millions of dollars on positive television and newspaper advertising.

"This report is not BPs mea culpa," said Democratic congressman Edward Markey, an outspoken critic of BPs handling of the disaster. "Of their own eight key findings, they only explicitly take responsibility for half of one. BP is happy to slice up blame, as long as they get the smallest piece."

Energy industry analysts were also not convinced by the BP findings, noting its investigators did not have access to everyone who had been involved in the project.

"Make no mistake, our view remains that this is BPs well, and BP is in charge of design and execution," Houston energy investment boutique Tudor Pickering Holt & Co said in a note.

The BP investigation found fault with Transocean employees aboard the rig at the time of the accident.

"Over a 40-minute period, the Transocean rig crew failed to recognize and act on the influx of hydrocarbons into the well," BP said.

But Transocean said BP was seeking to conceal the key factor that led to the rig explosion -- the well design.

"In both its design and construction, BP made a series of cost-saving decisions that increased risk," it said.

Halliburton joined Transocean in rejecting the findings, saying the BP report contained "substantial omissions and inaccuracies" and stressed it was fully indemnified for any allegations in the document.

In pointing the finger at its contractors, BP said:

-- Halliburton had used an "unstable" cement mixture that allowed hydrocarbons to leak into the well.

-- There was "no indication" that Transocean had tested the automatic shut-off function on the blowout preventer before it was used on the Deepwater Horizon rig. Blowout preventers are designed to halt all oil and gas flow and contain pressure if there is an uncontrollable gush from a seabed well.

-- The rig crew diverted the flow of drilling mud and hydrocarbons into the wrong system after the blowout. This meant gas vented onto the rig floor, rather than toward the sea, where it would have been less likely to cause a blast.

Transocean spokesman Lou Colasuonno said the blowout preventer was "inspected, tested and went through a rigorous maintenance schedule prior to being placed on the Macondo well and was then tested weekly, right up until 72 hours prior to the blast."

"Any statement to the contrary is false," he said.

The damaged blowout preventer is key evidence in criminal and civil investigations of the blast. BP retrieved it from the seabed on Saturday under watch of federal investigators and it is being sent to a NASA facility in Louisiana.

Additional reporting by Matt Daily in New York, Kristen Hays in Houston and Matt Spetalnick in Washington; Writing by Ross Colvin; Editing by John OCallaghan and Tim Dobbyn

The Fed said in its Beige Book compilation of anecdotal reports that modest growth continued in the five western districts: St. Louis, Minneapolis, Kansas City, Dallas, and San Francisco.

At the same time growth was mixed or had slowed in five other areas: New York, Philadelphia, Richmond, Atlanta, and Chicago.

The remaining two districts, Boston and Cleveland reported positive developments and improvements in business activity.

Upward price pressures remained quite limited for most categories of goods and services, and wage pressures were also subdued, the Fed said.

Reporting by Mark Felsenthal; Editing by Neil Stempleman

The September poll marked the third consecutive month economists had scaled back expectations for gross domestic product in the second half, and followed the U.S. governments announcement on Friday that unemployment ticked up to 9.6 percent in August.

Lower growth expectations means the U.S. Federal Reserve is unlikely to raise interest rates until the third quarter of 2011, according to the poll, not the second quarter as forecast in a poll a month ago. However, the chances of the worlds biggest economy falling back into recession have fallen to 20 percent, from 25 percent a month ago.

The median of forecasts in a survey of more than 70 economists puts annualized U.S. GDP growth at 1.8 percent in the third quarter of this year and 2.1 percent in the fourth quarter.

A similar poll conducted in early August forecast third-quarter growth at 2.4 percent and fourth-quarter growth at 2.5 percent. A poll taken in July forecast growth of 2.6 percent and 2.7 percent during the respective quarters.

Struggling homes sales, weak consumer confidence and the lofty unemployment levels are prompting economists to rein in growth expectations.

"The real risk is sub-par growth for an extended period," said Michelle Girard, senior economist at RBS in Stamford, Connecticut.

Overall, GDP is forecast to average 2.7 percent in 2010, down from 2.9 percent in the August poll and 3 percent in the July poll. The median of forecasts in the most recent poll was for average GDP growth of 2.4 percent in 2011, down from an August forecast of 2.7 percent and a July forecast of 2.8 percent.

The government said on Friday that U.S. employment fell for a third straight month in August, with 54,000 jobs lost during the month. The drop was less than expected, however, and private hiring increased.

Still, the lack of substantial job creation troubled some economists. Jonathan Basile, economist at Credit Suisse in New York, said his bank on Friday reduced its expectations for third-quarter GDP to 2 percent from 2.5 percent, and for the fourth quarter to 2.2 percent from 3.2 percent.

"There has been a downshift in private jobs growth, and that is consistent with our new forecast which has just been downgraded," Basile said.

FED ON HOLD

The slower growth will probably mean the U.S. Federal Reserve will hold recommended interest rates at their current level near zero until at least the second half of next year, according to the results of the poll.

The median of forecasts is for the central bank to increase rates to 0.25 percent in the third quarter of 2011 from the current range of zero to 0.25 percent.

In the early August poll, the median called for an initial rate increase to 0.5 percent in the second quarter of 2011.

The Fed is now expected to increase interest rates to 0.75 percent in the fourth quarter of next year, down from an original estimate of a hike to 1.25 percent during the quarter.

And while growth is expected to slow, the median of forecasts from economists assigns only a 20 percent chance the U.S. will tip into a double-dip recession, down from a 25 percent chance in an August 27 poll.

Inflation was also forecast to remain subdued. The third- and fourth-quarter consumer price index was forecast at 1.2 percent and 0.9 percent respectively, which were virtually unchanged from the August poll. The overall CPI index was expected to be 1.6 percent higher for 2010, in line with Augusts forecast.

Core CPI, which does not include food or energy costs, was estimated at 1 percent in the third quarter of this year, up from 0.9 percent in the August poll, while fourth-quarter core CPI was pegged at 0.9 percent, which was unchanged from the previous poll.

Polling by the Bangalore Polling Unit

Editing by Susan Fenton