CAIRN Energy chief executive Simon Thomson has complained the oil and gas company is having to spend tens of millions of legal fees in connection with the Indian tax dispute it has been bogged down in for three years.

Mr Thomson told the Financial Times Edinburgh-based Cairn could end up suffering losses running into the hundreds of millions following the Indian government’s attempt to impose a $3.2 billion (£2.5bn) tax bill on the company, which he has described as spurious.

“There will be tens of millions of dollars of legal costs, as well as similar amounts we have lost having to sell assets at the wrong time,” said Mr Thomson. ”We’re talking about hundreds of millions altogether.”

The comments underline the scale of the challenges posed by the dispute, which started in 2014 and concerns events leading up to the flotation of Cairn’s former subsidiary in India in 2007.

This controls the giant fields found by Cairn in India before Mr Thomson succeeded Sir Bill Gammell as chief executive.

Cairn has said previously the government’s action has left the firm facing a $1bn loss on the remaining holding in its Indian subsidiary. The government has blocked it from selling the stake since January 2014.

In November 2015 Mr Thomson accused the Indian Government of forcing Cairn to shed around 40 per cent of its workforce following the claim. He said then Cairn had to axe jobs and sell off assets in order to save cash.

The dispute is subject to an arbitration process.

Cairn insists it has paid all taxes due.