Former US Secretary of State Henry Kissinger put pressure on the Indian Government to agree a legal settlement that let the American chemical company Union Carbide off the hook for the 25,000 people killed by the toxic gas disaster in Bhopal 30 years ago.

A letter released under freedom of ­information legislation reveals that the late Indian steel magnate JRD Tata wrote secretly to the Indian prime minister, Rajiv Gandhi, in May 1988 conveying ­Kissinger's concern about the delays in reaching agreement on the compensation to be paid to victims.

At the time, Kissinger - who became notorious around the world in the 1970s for being involved in some of most hawkish US foreign policy decisions - was an adviser to Union Carbide and other major US corporations.

Kissinger thought the company was prepared to make a "fair and generous settlement" that "would effectively counter any attack or criticism" because it was more than interim amounts suggested by Indian courts, Tata wrote. In February 1989, the Indian government agreed a settlement of $470 million (£300m).

This has since been widely derided as completely inadequate given the horrendous scale and persisting legacy of the disaster on December 3, 1984. Crucially, as part of the deal, all charges against Union Carbide and its managers were dropped - though this was subsequently overturned by India's Supreme Court in 1991.

The letter, obtained by Bhopal activists, is important because it confirms what many have long suspected: that the US and Tata were complicit in allowing Union Carbide to evade responsibility for the world's worst industrial accident. Activists have also released two diplomatic cables from the online campaign group WikiLeaks, showing that Kissinger helped build the pesticide plant that showered Bhopal with poisonous gas. When he was US Secretary of State in 1976 he facilitated a bank loan of $1.3m to Union Carbide to cover 45% of the cost of building the plant.

Five groups representing Bhopal survivors have now written to President Barack Obama criticising the "central role played by the US Government in the creation of the disaster in Bhopal and in the denial of justice to the victims". They accuse the US administration of protecting corporate profits over the lives and health of ordinary people.

In 2001, Union Carbide was taken over by the US chemical giant Dow, which is now worth $58 billion. Both companies have repeatedly refused to appear in courts in India to answer charges against them, most recently on November 12.

"Obama made British Petroleum pay $20bn for the Gulf of Mexico oil spill," said Balkrishna Namdeo of survivors' group the Bhopal Gas Peedit Nirashrit Pensionbhogee Sangharsh Morcha.

"We would like to ask him how his conscience allows him to support two US corporations that paid a tiny fraction of that amount for 2000 times more fatalities."

Salil Shetty, secretary general of Amnesty International, also called on Obama to act, arguing that the compensation granted in 1989 was just 14% of what was asked for and averaged less than $1000 per person.

"This was a woefully inadequate amount which, I think, exposes a shocking level of indifference and contempt towards the victims in India," he said, adding that Union Carbide and Dow had been given a haven from justice in the US and displayed an "arrogant contempt" for the Indian judicial system.

The two companies were the focus of a series of angry protests by thousands on the streets of Bhopal last week to mark the 30th anniversary of the disaster. Huge models of their corporate logos were spat on, doused in petrol then burned before cheering crowds outside the derelict and overgrown pesticide plant.

"We wanted to hit them where it hurt most," said leading Bhopal campaigner Sathyu Sarangi. "They have done huge damage to human health and the planet, and have been getting away with it."

He estimated that the $3.2bn compensation settlement agreed by a Dow subsidiary in 1998 for health problems caused by silicone breast implants in the US was 100 times more than that given to Bhopal survivors. Dow had also accepted liability for Union Carbide asbestos claims in the US, he argued.

Sarangi lambasted Dow for "double standards" and "environmental racism" because the value it put on lives in India was much lower. He also accused the company of employing "dirty tricks" to defend its interests.

In another loud and furious protest in Bhopal last week, activist groups named and shamed Dow, Union Carbide, Tata and more than 70 industrialists, officials, judges and others for failing to deliver justice to Bhopal survivors.

The accident started when methyl isocyanate, a lethal gas used for making insecticides, leaked from a tank at the Union Carbide plant, which was surrounded by densely packed housing. The regional government put the immediate death toll at 3787, but survivors say the real figure was closer to 8000.

The gas seared the lungs and burned the eyes of anyone exposed. In the three decades since, campaigners say the death toll has reached 25,000 "and counting" because of an epidemic of diseases caused by lingering water and soil contamination around the plant.

As many as 150,000 are still battling chronic illnesses, with tuberculosis and cancers "rampant", they say. There are estimated to be 50,000 still living in the vicinity of the plant whose groundwater is contaminated by toxic chemicals.

Young children born disabled or ill, along with those made sick from the lingering contamination, line the hallway of the Chingari clinic in Bhopal. It regularly sees 200 children, and has another 500 on its waiting list.

The clinic's manager, Tarun Thomas, says new children are needing help every day. "Dow is washing its hands of the whole thing," he said. "Look at these children and how they are suffering because Dow refuses to take responsibility."

The campaign against Dow has been backed by a motion lodged in the Scottish Parliament by the SNP MSP Bill Kidd. A delegation of six trades unions from Scotland was in Bhopal last week to show solidarity with the survivors, carrying messages of support from Glasgow, Edinburgh, Stirling and Falkirk councils.

Dow described the 1984 gas release as a "terrible tragedy" that should never be forgotten. "Let's also not forget the facts or rewrite history," company spokesman Scot Wheeler told the Sunday Herald.

"The facts are that Dow was never in Bhopal nor is there any assumed liability, as misrepresented by some groups. It is important to note that Dow never owned or operated the plant," he said.

"Dow acquired the shares of Union Carbide Corporation more than 16 years after the tragedy, and 10 years after the $470m settlement."

He added: "As Dow never owned or operated the Bhopal facility, any efforts to directly involve Dow in legal proceedings in India concerning the 1984 Bhopal tragedy are inappropriate, misguided and without merit."

Rob Edwards travelled to Bhopal with a Scottish trades union delegation.