Friday paper round-up: BP, Lehman Brothers, Trafigura

Civil servants are scrambling to put together proposals that will allow Britain's pension funds to bankroll the building of motorways and power stations through a special state-controlled bank.

The Treasury and the Department for Business hope to have plans far enough advanced for the Chancellor to make an announcement in the Budget on Britain's first infrastructure bank, the Times reports.

Gordon Brown and Nicolas Sarkozy will on Friday try to hammer out a compromise deal over European Union reforms that the US and UK believe could damage the hedge fund and private equity industries. The British prime minister shares the concerns of Tim Geithner, US treasury secretary, that a draft EU directive to introduce tighter regulatory controls could impose new barriers to business, the FT reports.

Trafigura, one of the world's largest and most profitable commodities traders, plans to approach investors next week over its first bond issue, in a move to diversify its funding.The capital market issue would mark a significant departure for the reserved trader, which has until now relied on bank credit lines. Tapping the bond markets will force Trafigura to open its books for the first time to investors, raising its public exposure, the FT reports.

UniCredit has alerted investors in a client note that Britain is at serious risk of a bond market and sterling debacle and faces even more intractable budget woes than Greece. The Italian-German group, Europe's second largest bank, said Britain's tax structure will make it hard to raise fresh revenue quickly enough to restore confidence in UK public finances. "I am becoming convinced that Great Britain is the next country that is going to be pummelled by investors," said Kornelius Purps, Unicredit 's fixed income director and a leading analyst in Germany, the Telegraph reports.

BP was last night preparing for a possible legal battle over a giant oilfield in the Caspian Sea as it announced a $7 billion (£4.6 billion) deal designed to bolster its position in three of the world's most promising oil provinces. However, it emerged last night that a key plank of the deal - the acquisition of Devon's 5.6 per cent stake in a giant offshore field in Azerbaijan's Caspian Sea, could be vetoed by Devon's partners in the project, triggering a potential legal battle, the Times reports.

Virgin Media is to take its fibre cables above ground for the first time in a move that could bring superfast broadband to one million homes in hard-to-reach rural areas.Virgin's subterranean network of cables currently reaches 12.6 million homes across the UK. It announced yesterday that it was testing the wires on telegraph poles to extend the reach without digging up more roads, the Independent reports.

Sir Brian Pitman, the former Lloyds TSB chairman who carved a reputation as one of Britain's most respected bankers, has died at the age of 78. Sir Brian, who worked for Lloyds for 49 years and who in 2008 headed Virgin's unsuccessful bid for Northern Rock, died early yesterday morning in hospital after suffering a heart attack on Tuesday. After retiring from Lloyds in 2001, Sir Brian took on a number of part-time posts, most recently becoming chairman, in January, of Virgin Money, the bank seeking to expand its operations with a position on the high street, the Times reports.

Dick Fuld, the former chief executive of Lehman Brothers, and some of his closest lieutenants used a "lazy accounting gimmick" to hide the fact that the bank was insolvent, an explosive report by a court-appointed legal examiner has found. Anton Valukas, of Jenner & Block, who was appointed as "examiner" by the judge handling Lehman's bankruptcy, paints a damning picture of Lehman in the two years leading to its demise as a hot-house institution so obsessed with growth that senior executives said openly that they did not want to hear "too much detail" about the risks they might face in case it held them back, the Times reports.

JP Morgan Chase and Citigroup helped cause the illiquidity that led to the collapse of Lehman Brothers, the bankrupt bank's examiner said today in a report filed in Manhattan federal court, the Telegraph adds. By changing guarantee agreements and making new demands for collateral, JP Morgan and Citigroup helped to precipitate the liquidity crisis that doomed Lehman, Valukas said.