Lawyers for more than 11,000 Nigerians initiated formal legal proceedings against oil giant Shell in London on Friday after the breakdown of negotiations on compensation following two oil spills.

The lawsuit introduced at the High Court relates to two spills in the Niger Delta in 2008 which damaged the Bodo community, a rural coastal settlement consisting of 49,000 people who live in 35 villages.

Shell's Nigerian unit, Shell Petroleum Development Company of Nigeria (SPDC), has admitted liability for two spills of a total of about 4,000 barrels, after the spills were independently verified.

But Shell strongly contests the claims of London-based lawyers Leigh Day that some 500,000 barrels were spilled, arguing that the majority of spills are caused by illegal attempts to tap into pipelines.

Most of the claims were brought by people who claim their livelihood as fishermen has been destroyed.

The lawyer representing the claimants, Martyn Day from Leigh Day, said in a statement: "We are desperately disappointed that the attempts to negotiate a settlement for all those affected have now failed.

"We had thought that the invitation to sit around the table meant that Shell was taking the impact of the two oil spills seriously.

"We are now left with the only option of taking the claims through the UK Courts to obtain justice for the people of Bodo."

Shell argues that the legal dispute is hampering its efforts to clean up pollution and says it should never had been brought in Britain because there is an established practice in Nigerian law to settle such claims.

Mutiu Sunmonu, managing director of SPDC, said: "We want a speedy resolution of this dispute so that we can pay fair compensation.

"The ongoing dispute is also preventing us from gaining access to the area and cleaning up the pollution caused by others since 2009.

"It is disappointing that the case was brought in the UK in the first place... The only beneficiaries of UK litigation will be the lawyers."

Shell is one of the biggest companies operating in the oil-rich Niger Delta. It and other firms have frequently faced criticism from activists that they have not done enough to prevent oil leaks at their facilities.