Royal Caribbean Cruises, the world's second largest cruise line, has agreed to pay a record $18m fine (£11.4m) for illegally dumping tonnes of waste oil and chemicals into US waters.

The Miami-based company, which is currently building the world's largest cruise ship, admitted to 21 counts of deliberately dumping oily bilge water and hazardous chemicals from its dry cleaning shops and its printing and photo processing equipment.

The fine was so large because the crew lied to the US coast guard when asked about the slicks trailing its ships. It also comes after evidence was found that it had indulged in a fleet-wide conspiracy to dump oil into US coastal waters.

It was the second time the company had paid the penalty for pollution. Last year it was fined $9m (£5.7m).

Other companies have paid higher fines for causing environmental damage but $17m is the highest paid until now by a cruise line.

"Royal Caribbean used our nation's waters as its dumping ground, even as it promoted itself as an environmentally 'green' company," the US attorney general, Janet Reno, said yesterday.

"This case will sound like a foghorn throughout the entire maritime industry."

Two Royal Caribbean engineers are currently on the run, having fled criminal charges relating to the pollution incidents. The US justice department said it was still investigating other potentially responsible individuals.

Ms Reno said that the company's ships were rigged with secret "bypass pipes" used by engineers to dump bilge waste overboard, often at night.

"To make matters worse, the company routinely falsified the ships' logs - so much so that its own employees referred to the logs with a Norwegian term meaning fairy tale book," she added. "If people flimflam us, they should expect the consequences."

The case highlights the difficulty of policing the cruise industry where crew members are under pressure to keep costs low. Dumping waste materials accumulated during long cruises is believed to save many thousands of pounds.

Royal Caribbean admitted that almost half its fleet continued to dump waste and falsify records after the US government investigation began in 1994.

The US justice department said it was particularly determined to ensure that polluters could not hide behind a foreign flag.

Royal Caribbean operates under a Liberian flag but its 17 ships carry mostly western passengers to 150 destinations from northern Alaska to the Panama canal and Europe.

The investigation began after the Sovereign of the Seas, then the world's largest cruise ship, was spotted leaking oily waste. US coast guards boarded the ship but were told that nothing was wrong.

Under yesterday's plea agreement, Royal Caribbean will pay six separate fines in territories where it breached environmental regulations: Anchorage, Miami, New York, Los Angeles, Virgin Islands and Puerto Rico. These jurisdictions still have to rule on the plea deal.

The company, which is controlled by the shipping company Anders Wilhelmsen and the Pritzker family of Chicago, which owns the Hyatt hotel chain, was unavailable for comment yesterday.

Royal Caribbean has agreed to operate under a court-supervised environmental compliance plan for the next five years and will also allocate $6m (£3.8m) of its penalty to community service for the US fish and wildlife foundation and the national park service.

Last year the world's largest cruise line, Carnival, was fined $2m (£1.3m) for discharging oil waste off Alaska.