· Engine shut down but US to UK flight continues · Jumbo jet had 18 crew and 351 passengers on board

Air traffic controllers monitoring a British Airways jumbo jet were stunned at the pilot's decision to try to "get as far as we can" after an engine caught fire on takeoff, a transcript of discussions between the plane and the control tower revealed.

The controllers in Los Angeles expected the four-engine Boeing 747 to turn around but, after taking advice from BA's operations base, the pilot carried on towards London. He told air traffic control: "We just decided we want to set off on our flight-plan route and get as far as we can."

He was allowed on his way, but an air traffic controller who had seen the flames coming from the engine told a colleague: "If you would have saw what we saw out the window, you'd be amazed at that."

Flight 268 eventually made it to the UK, but the pilot was so concerned about his fuel levels that he carried out an emergency landing in Manchester.

The UK's Air Accident Investigation Branch has already made safety recommendations in the wake of the incident, which happened in February last year. But the transcript, obtained by the Wall Street Journal under US freedom of information laws, may reignite the controversy.

In the transcript a controller warns the plane: "It appears you have flames coming out of either your number one or number two engine." The captain replies: "We're shutting it down."

The tower controller passes the plane on to another controller and tells him: "We don't know what he wants to do. We know he wants to come back, probably."

The pilot is told to climb to 5,000ft and advise them of his intentions. Pilot: "Climb and maintain 5,000. We are able. We will advise. We had a surge on takeoff and we're just doing the checks."

The controller asks how many people are on board. The pilot says 351 passengers and 18 crew, and tells the controller: "We have now shut down the No 2 engine. We are going to consult our company and see what they require us to do."

A few minutes later the pilot says they are going to continue. Clearance is given and the controller speaks to his colleague who saw the flames. "Is he going?" the original controller asks. "He's going."

"If you would have saw what we saw out the window, you'd be amazed at that."

By pressing ahead with the flight, the aircraft avoided a £100,000 bill for delay compensation, though there is no suggestion that this is why this flight went ahead.

The Air Accident Investigation Branch found that since April 2001, BA had recorded 15 incidents in which jumbo jets continued after an engine had been shut down. Its report flagged up that different operators had different policies on what pilots should do if one engine was lost. It recommended that the Civil Aviation Authority, the Federal Aviation Authority in the US and other authorities should "review the policy on flight continuation ... following shutdown of an engine, in order to provide guidance to operators".

BA yesterday insisted the aircraft was operating in accordance with the CAA's regulations. It said the AAIB's report concluded that the crew had "sufficient fuel and performance" to reach the UK.