BP, one of the world's most profitable firms and active in more than 90 countries, has pledged to make no more political contributions anywhere.
The oil giant's move comes as legislators in the United States, where it does 40 per cent of its business, consider restrictions on the influence of money in politics, and is intended to address criticism of corporate influence on government policy worldwide.
The financial collapse of energy trading company Enron has increased pressure to tighten up US political campaign finance laws. Enron provided almost $6 million to politicians in the period since 1989 and won close ties to a broad range of policymakers.
"We have an important role in society, but we mustn't confuse our role with the role of others," BP chief executive Mr John Browne said.
"We must be particularly careful about the political process ... because the legitimacy of that process is crucial both for society and for us as a company working in that society," he added.
"That is why we've decided, as a global policy, that from now on we will make no political contributions from corporate funds anywhere in the world. We'll engage in the policy debate, stating our views and encouraging the development of ideas, but we won't fund any political activity or any political party."
BP is the world's third largest private sector oil producer and one of the biggest foreign-based firms operating in the United States. A spokesman said the policy decision would mainly affect its business there.
Most of the $840,000 of political donations BP made in the United States last year were a legacy of donations made by the US oil groups Amoco and Arco, now merged into the BP empire.
At a U.S. federal level, its $250,000 of donations were split about 60-40 in favour of the Republican Party, while the $590,000 it donated at state level was split about 60-40 in favour of the Democratic Party.
As a key oil producer in Alaska, BP has become the target of criticism from environmental groups opposed to drilling in protected areas there. Outside the United States it has come under fire from human rights groups for its relationships with Chinese firms.