Half of BP oil spill damages claims will be rejected, says fund administrator

Any claims without supporting documentations "will be denied"

More than half of the emergency claims out of the 450,000 applications received for the Gulf of Mexico oil disaster will be rejected and only about $2.3bn will be paid to 175,000 people from the BP's $20bn (£12.6bn) compensation fund because of "woefully inadequate" or no supporting documents, Kenneth Feinberg, a Washington attorney overseeing the fund, said.

Even before the fund was established in August, Feinberg said BP paid spill victims $400m in the first four months of the spill.

"I am estimating that 125,000 applications have come in with no documentation whatsoever. None. Those claims will be denied. An additional 100,000 claims have come in with documentation that is woefully inadequate," he said.

He added that about 1,000 claims have been forward to the Justice Department to be investigated for fraud.

Moreover, according to new rules in a 12-page document posted on the website for the Gulf Coast Claims Facility, spill victims receiving interim payments would retain their right to sue and continue to receive interim payments until they decide to accept a final payment. Interim payments will be made quarterly.

However, if the victims choose to accept a lump-sum amount now, they would have to forfeit the right to sue BP or any of the other companies involved with the Deepwater Horizon rig.

Feinberg said he is also creating an appeals process for claimants - for those who disagree with their final payment.