* LME acknowledges "very significant" polarisation of opinions
* LME to act on incentives warehouses offer to traders
* 50-day queue threshold to remain under constant review
By Maytaal Angel and Susan Thomas
LONDON, Nov 7 (Reuters) - The London Metal Exchange, aiming to appease critics of its global storage network, on Thursday slashed queues for metal, beefed up its powers to act against market abuse and will review its agreement with warehouse owners.
The world's largest and oldest metals marketplace is under intense regulatory and legal pressure over its storage system, with complaints about queues of more than a year and large surcharges to withdraw material from its warehouses.
The crisis has drawn scrutiny from British and U.S. regulators and complaints from industrial users, including beer and can maker MillerCoors LLC and Novelis, which manufactures sheet used to make drinks cans.
The LME proposed new rules in July to overhaul its delivery system from next April that would force warehouses to release more stocks once the wait time breaches 100 days.
Its new plan has cut that to 50 days and the LME said it would keep that figure "under active review".
The exchange also said it had given itself the power to act swiftly to prevent abuses of the system and it will have the authority to probe whether warehouses are manipulating flows of metal to create backlogs.
LME Chief Executive Garry Jones said the exchange was determined to press ahead with the changes, despite a trickle of early criticism of the new rules.
"There may well be legal challenges but we are going ahead as planned," Jones told a news conference at the 136-year-old exchange's headquarters on Leadenhall Street in the City, London's financial district. "We are not going to hang back from the process."
Britain's regulatory watchdog, the Financial Conduct Authority, said the LME's new plan was a step towards increasing transparency in the metals market.
The LME acknowledged, however, that there was "a very significant polarisation of opinion" on the issue. Industry insiders were also divided on the outcome.
"The overall plan sounds like a very reasonable step. But some people will be very unhappy because it takes the floor out of their business model," a senior metals industry source said.
A second industry source said: "They have turned the supertanker around and pointed it in the right direction. This is unequivocally going to reduce metal in bottleneck locations in the LME. The bottlenecks are so large, and the warehouses are so full it's going to take us a long time to get to that destination."
Customers and U.S. lawmakers have accused warehouse owners, including Goldman Sachs, JPMorgan Chase & Co, Glencore-Xstrata and Trafigura, of artificially inflating waiting times and lines to boost rents for warehouse owners and cause metal costs to rise.
MillerCoors, a major customer, has estimated the delays have cost consumers more than $3 billion.
"Frankly I think it (the plan) is a very good paper," a third senior industry source said. "The only problem is that it begs the question, why has the LME maintained for years that there wasn't a problem."
Warehouse owners and former LME CEO Martin Abbott have said the complaints over long lines are unjustified, arguing there is no shortage of metal.
Instead, they have said the long lines have been created by traders trying to move metal to rival warehouses that are offering financial incentives in a bid to boost their own rental income.
Goldman Sachs and Glencore declined to comment on the LME's new plan. JPMorgan, which is in the process of selling its physical commodities assets including its warehousing business, also declined to comment.
Trafigura's head of non-ferrous and bulk commodities, Simon Collins, said the trade house welcomed the LME's "bold reforms to its warehousing policy".
The LME also said it had started a legal review of what steps it can take on high storage charges including rent, and is looking with lawyers at the effectiveness of the agreement it has with warehouse companies.
The LME urged warehouses to show self-discipline in terms of rents, but warned the firms it would consider using its new powers to cap rents if they were hiked in response to the new rules.
Novelis Chief Supply Chain Officer Nick Madden, one of the LME's fiercest critics, welcomed the plan. "At first review, the rule changes outlined by the LME appear to be a significant step in the right direction," he said.
But some say 50 days is still too long to wait for metal.
"Any day over one day is a disgrace to a free market," metals trader Anthony Lipmann said.
"There is no proportion of days for getting your titled goods that you own from a warehouse that is right beyond immediate delivery. The metal trade for its safe and orderly function requires nothing less than immediate delivery."