Oil giant BP said it would cut three quarters of dividends, significantly reduce its investment program and sell $10 billion of assets to fund a planned $20 billion fund to pay for its Gulf of Mexico oil spill.

The commitments, outlined in a statement on Wednesday, are harsher penalties than most investors had expected and follow BP chairman Carl-Henric Svanberg's meeting with President Obama on Wednesday.

Investors had expected the suspension of BP's dividend, or payment in shares for a couple of quarters and had not expected BP to be forced to sell assets and cut investment -- moves that will curb BP's growth going forward.

The decisions to cut investment and sell assets come despite the fact BP is only committed to putting $5 billion this year into the new fund, which will be administered by a body independent from BP.

BP's free cashflow and massive credit lines could easily cover such an amount.

In 2011 and beyond, BP will make payments into the fund of $1.25 billion per quarter, until the fund amounts to $20 billion.

Up to that, BP's commitments will be assured by the setting aside of U.S. assets with a value of $20 billion, the company said.

(Reporting by Tom Bergin; Editing by Doina Chiacu)