The Guardian can reveal evidence today of a massive cover-up by the British oil trader Trafigura, in one of the worst pollution disasters in recent history.

Internal emails show that Trafigura, which yesterday suddenly announced an offer to pay compensation to 31,000 west African victims, was fully aware that its waste dumped in Ivory Coast was so toxic that it was banned in Europe.

Thousands of west Africans besieged local hospitals in 2006, and a number died, after the dumping of hundreds of tonnes of highly toxic oil waste around the country's capital, Abidjan. Official local autopsy reports on 12 alleged victims appeared to show fatal levels of the poisonous gas hydrogen sulphide, one of the waste's lethal byproducts.

Trafigura has been publicly insisting for three years that its waste was routine and harmless. It claims it was "absolutely not dangerous".

It has until now denied compensation claims, and its lawyers repeatedly threatened anyone worldwide who sought to contradict its version. It launched a libel case against BBC Newsnight, forced an alleged correction from the Times, demanded the Guardian delete articles, and yesterday tried to gag journalists in the Netherlands and Norway with legal threats.

But the dozens of damning internal Trafigura emails which have now come to light reveal how traders were told in advance that their planned chemical operation, a cheap and dirty process called "caustic washing", generated such dangerous wastes that it was widely outlawed in the west.

The documents reveal that the London-based traders hoped to make profits of $7m a time by buying up what they called "bloody cheap" cargoes of sulphur-contaminated Mexican gasoline. They decided to try to process the fuel on board a tanker anchored offshore, creating toxic waste they called "slops".

One trader wrote on 10 March 2006: "I don't know how we dispose of the slops and I don't imply we would dump them, but for sure, there must be some way to pay someone to take them." The resulting black, stinking, slurry was eventually dumped around landfills in Abidjan, after Trafigura paid an unqualified local man to take it away in tanker trucks at a cheap rate.

Trafigura's libel lawyers, Carter-Ruck, recently demanded the Guardian deleted published articles, saying it was "gravely defamatory" and "untrue" to say Trafigura's waste had been dumped cheaply and could have caused deaths and serious injuries. The Dutch paper Volkskrant and Norwegian TV said they were yesterday also threatened with gagging actionsTrafigura also launched a libel action against the BBC's Newsnight, complaining it had been wrongly accused of causing deaths, disfigurement and miscarriages, and had "suffered serious damage to their reputation". The BBC filed a fighting defence this week, accusing Trafigura of knowing its chemicals were "highly toxic, potentially lethal and posed a serious risk to public health". The broadcaster also alleged a cover-up, saying Trafigura's denials "lack credibility and candour".

The UN human rights special rapporteur, Professor Okechukwu Ibeanu, criticised Trafigura for potentially "stifling independent reporting and public criticism" in a report the oil trader tried and failed to prevent being published in Geneva this week.

He wrote: "According to official estimates, there were 15 deaths, 69 persons hospitalised and more than 108,000 medical consultations … there seems to be strong prima facie evidence that the reported deaths and adverse health consequences are related to the dumping."

Trafigura's lobbyists, Bell Pottinger, claimed to be "appalled" by the report, saying it was "premature", "inaccurate", "potentially damaging", "poorly researched", and "deeply flawed".

Yesterday Greenpeace launched a legal action in Amsterdam calling for the oil firm to be prosecuted there for homicide or grievous bodily harm. It said: "This intentional pollution … has caused many people to suffer serious injuries and has even led to death."

Trafigura said it "utterly rejected" claims of a cover-up. "Every statement that has been made … has been made in good faith". The firm said the autopsy reports were unreliable and that hydrogen sulphide in the waste was only there in "potential" form. It had never actually been released. It said the emails contained "crude and distasteful" language, but had been taken "out of context" and should "not be taken literally".

It repeated denials that the slops could have caused death or serious injury, and were highly toxic. It denied lying about the composition of the slops.

A sudden public announcement about the settlement offer in the compensation case followed legal attempts yesterday to prevent publication of Trafigura documents. The compensation deal is likely to be confirmed imminently, according to Martyn Day, a senior partner at the British law firm Leigh Day, which has brought one of the biggest group actions in legal history, seeking damages of £100m.

He said today in Abidjan, where he has been negotiating the settlement: "The claimants are very pleased."

Trafigura said the deal – for an undisclosed amount – was likely to be acceptable to most if not all of the claimants. It was based on an acceptance that the company had no liability for the most serious deaths and injuries alleged in the dumping scandal. Trafigura says it is the world's third-biggest private oil trader, and declared a $440m profit last year. Its 200 traders are reported to receive annual bonuses of up to $1m each.