Fuel companies have admitted environmentally-friendly diesel was to blame for disabling taxi engines.

In a joint statement issued yesterday, fuel firms Esso and Shell said the problem had affected between 50-60 taxis - around ten percent of the Island's fleet.

They have promised to pay repair costs for taxi drivers who can prove they have been affected as well as compensation for lost earnings of up to $250 per day.

Drivers reported fuel leaks after seals on injection pumps became damaged. The problem was made worse when suppliers ran out of replacement seals.

Motor firm Rayclan Ltd said yesterday that a new batch of ten had arrived at noon, although only six were left late yesterday afternoon, four of which were spoken for. Another order of ten is due to arrive tomorrow.

HWP CEO Jonathan Brewin said 20 seals were due in from Europe via FedEx today when he would also know more about the next batch.

Shell general manager John Vickerman said a batch of fuel with especially low levels of sulphur had arrived on October 4 and hit the streets shortly after.

He said most of the vehicles affected had been Mitsubishi ML300s which were at least six years old with more than 400,000 kilometres on the clock.

An assessor will work out compensation with taxi drivers who have been forced off the road.

Sole owners will get $200 for every day off the road while $250 will be paid for taxis shared between two drivers.

Esso general manager Ed Edelson said the companies were still committed to the environmentally friendly fuel which would lead to cleaner air.

He said: "We are sure that when the older seals are replaced the problem won't re-occur."

Both companies said taxi drivers had been understanding and polite about the problem.

Mr. Edelson added: "I think we were quick to get to the bottom of this and come up with a joint solution."

Taxi driver Dennis Bean, who had been sidelined by the problem which led to fuel leaking onto the road, said: "I am glad to hear about this and I am sure other taxi drivers will be just as glad."

He said he feared the fuel could continue to cause problems.

He said: "We'll see how it goes."

To get a compensation claim assessed call 298-0861.