Alabama demands rule change over BP oil fund

MOBILE, Alabama (Reuters) - The terms of a $20 billion (£12.97 billion) fund to reimburse economic victims of the BP Plc oil spill must be changed to lift a 90-day time limit on claims, Alabama's attorney general said on Friday.

The fund, administered by attorney Kenneth Feinberg, should place no restrictions on the time by which people must claim money, said Troy King after a meeting in Montgomery, the capital of Alabama, with his counterparts from other Gulf states.

BP set up the fund in June under pressure from the White House. Under its terms, claimants have 90 days from when the deepwater rig in the Gulf of Mexico is capped -- August under latest projections.

But oil could wash up for many months and so businesses and property could sustain damage long after the three-month limit, said King, adding that attorneys general from Florida, Mississippi, Louisiana and Texas share his view.

"We want ... them (the fund) to make payments as long as there are claims. With the 90-day cap we won't know damages," King said in an interview with Reuters.

"What if a hurricane comes in at 120 days and blows oil 20 miles inland? We won't know full damages for a long time," he said.

King also seeks a change to a rule under which claimants sign a waiver once they have been paid, preventing them from making fresh demands on the fund.

Feinberg, who is scheduled to hold a town hall meeting in Mississippi on Saturday, was due to attend Friday's meeting but did not come, King said.

Anger on the Gulf Coast is growing towards Feinberg from people who say they are frustrated by a lack of speed and transparency in the claims process. One complaint is that it is difficult to track the progress of claims.

King criticized Feinberg as a "shill" for BP and argued that the $20 billion should be kept in Gulf coast banks.

"It is just one more thing showing how Feinberg is tone deaf to the Gulf Coast," King said.

(Writing by Matthew Bigg; Editing by Xavier Briand)