NEW YORK, Sept 7 (Reuters) - Attorneys who represented the state of Michigan as part of a nationwide legal battle with the tobacco industry should receive $450 million in fees, an arbitration panel said on Friday, though one panel member called the award

The award will have to be paid by the tobacco companies on top of the $8.7 billion the state will receive over the next 25 years as part of a nationwide settlement agreement. The arbitration panel's decisions are final and may not be appealed. The award was the 16th made by the Tobacco Fee Arbitration Panel, which was set up to decide how much the tobacco industry should pay in fees to outside attorneys in addition to the $206 billion Master Settlement Agreement reached in 1998 between the four major tobacco companies and 46 states. The panel was set up to rule on attorneys' fees for 46 states that were involved in the Master Settlement Agreement as well as Mississippi, Texas and Florida, which settled earlier with the industry. The settlement was reached between the states and Philip Morris Cos. Inc.; R.J. Reynolds Tobacco Co., a unit of R.J. Reynolds Tobacco Holding Inc.; Brown & Williamson Tobacco Corp, a unit of British American Tobacco Plc; Loews Corp.'s Lorillard Tobacco Co.; and smokeless tobacco maker UST Inc.. Several billion dollars in attorneys fees have already been awarded. Former U.S. District Judge Charles Renfrew, the tobacco industry appointee to the three-member panel, sharply dissented from the ruling, saying the award was ``grossly disproportionate'' to awards given to Ohio and Illinois attorneys. Though all three Midwestern states received comparable awards, the Michigan award is 3.7 times larger than the one in Illinois and 1.7 times larger than Ohio, Renfrew said. ``It is grossly excessive,'' Renfrew said in his dissent. The majority noted in its opinion that Michigan was the first large Midwestern state to file a lawsuit against the tobacco industry. They also noted that the outside attorneys helped with the national settlement and not just with an award for Michigan. ``It is our conclusion that it would be unfair to simply assess Private Counsel on their 'Michigan only' role given their numerous, unique contributions to the tobacco wars overall,'' the majority opinion said.

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