Princess Cruise Lines – whose European headquarters is in Southampton – have been fined a record £32 million ($40m) after dumping gallons of oil waste off the English coast.

The cruise line, part of the Carnival group, pleading guilty to seven charges in the United States that involved one ship’s use of a so-called magic pipe to divert oily waste into the waters.

The hearings were instigated after information was passed to the American authorities by the Southampton-based Maritime and Coastguard Agency (MCA).

Miami US attorney Wifredo Ferrer told a news conference the penalty was the largest ever of its kind. A plea agreement filed in federal court also requires Carnival to submit 78 cruise ships across its eight brands to a five-year environmental compliance programme overseen by a judge.

Mr Ferrer said the illegal practices came to light when an engineer aboard the Caribbean Princess discovered the “magic pipe” in 2013 off the coast of Britain and told investigators about it.

The whistle-blower informed the authorities and then quit the ship when it arrived in Southampton.

The authorities have declined to reveal where the dumping took place. The oily waste comes from a ship’s engines and fuel systems. Instead of being dumped raw into the ocean it is supposed to be offloaded when a ship is in port and either burned in an incinerator or taken to a waste facility.

Authorities later learned the ship had been illegally discharging oily water into the ocean since 2005.

In a statement Princess said it was “extremely disappointed” that employees had violated company policy and federal law regarding discharge of pollutants.

The cruise line said it cooperated with investigators after the magic pipe was unveiled in 2013 and had taken numerous steps to fix the problem.

“Although we had policies and procedures in place it became apparent they were not fully effective,” the statement said.

“We are very sorry that this happened and have taken additional steps to ensure we meet or exceed all environmental requirements.”

Speaking after the hearing, Mr Ferrer said: “Our open seas are not dumping grounds for waste. One thing we must never do is take our clear blue oceans for granted.”

One single illegal discharge dumped 4,227 gallons of oil-contaminated waste about 20 miles off the coast of England in 2013, according to court documents.

The documents also show illegal practices were found on four other Princess ships, including use of clean ocean water to fool onboard sensors that would otherwise detect dumping of improperly contaminated bilge water.

Authorities say cost savings was the motive and that the ship’s officers and crew conspired to cover up what was going on.

John Cruden, assistant attorney general for the US justice department’s environmental division, said the Caribbean Princess “violated the law, they covered it up and then they lied about it”.

“The pollution was the result of more than just bad actors on one ship. It reflects very poorly on Princess’s culture and management.”

“We’re sending a strong message in this case to the entire industry.”

The plea agreement and penalty must be approved by a Miami federal judge. If it is, $14m will be earmarked for environmental projects in Florida, Britain and in international open waters.