"We believe it will provide more equitable, timely and certain compensation to the victims of asbestos-related diseases," said a copy of the letter obtained by Reuters.

The current proposal is a bipartisan compromise agreed to by Pennsylvania Republican Sen. Arlen Specter, who chairs the Senate Judiciary Committee, and Vermont Democrat Sen. Patrick Leahy, the ranking Democrat on the panel.

Fibers of asbestos, which was used in building materials, auto parts and other products for decades, have been linked to cancer and other diseases. Injury claims have forced many companies into bankruptcy.

The compensation fund would be financed by companies facing asbestos lawsuits and their insurers, while ending the rights of victims to sue. The highest individual award, $1.1 million, would go to victims of mesothelioma, a lethal cancer.

But some Republicans want changes in the plan, and Specter has postponed until next week a decision on whether to formally introduce it as legislation while he talks with them.

That delay sent the stocks of companies facing asbestos litigation down Wednesday after big gains Tuesday on the agreement between Specter and Leahy.

W.R. Grace and Co. stock slipped 61 cents, or 5.7 percent, to $10.02 a share. Shares of USG Corp. shares closed down 67 cents or 1.5 percent at $43.23.

Some asbestos victims see the plan as a business bailout, and union support is critical if the plan is to get the backing of more Democrats, labor's traditional political allies.

The UAW has about 710,000 active members and over 500,000 retired members in the United States, Canada and Puerto Rico.

Reuther, in his letter, said there was widespread agreement that the current system of filing asbestos lawsuits was failing "miserably" in compensating asbestos victims. Many had to wait for years for payment, awards were highly unpredictable and much of the money went to lawyers.

In a telephone interview, Reuther said many people who had worked in brake plants had asbestos disease, while union jobs were threatened by asbestos-related bankruptcies, such as that of auto parts supplier Federal-Mogul.

"We just think the current system is a way of bashing the companies, but it winds up hurting the workers. That's why we think having a schedule of contributions of companies and insurers to finance this fund is a better way," he said.