By Jonathan Stempel

(Reuters) - BP Plc on Friday ended its bid to oust the administrator overseeing payouts to businesses and individuals claiming damages arising from the 2010 Gulf of Mexico oil spill, citing steps the administrator has taken to reduce the threat of fraud.

The British oil company withdrew its appeal of a federal judge's decision not to remove the administrator, Patrick Juneau, who is reviewing claims under a 2012 settlement tied to the explosion of the Deepwater Horizon drilling rig.

BP had long complained that Juneau was awarding excessive payouts, including to claimants who suffered no harm, and was tainted by a conflict of interest.

But it said a review of payout procedures by former FBI director Louis Freeh shows that improvements have been made, including the addition of "scores" of fraud investigators.

"This marks the beginning of a new and more productive relationship between BP and the claims program," BP America President John Mingé said in a statement.

BP last month raised its estimate of the settlement's cost to $9.9 billion. It originally had estimated $7.8 billion.

Steve Herman and Jim Roy, lawyers who helped negotiate the settlement on behalf of claimants, said in a joint statement that they hope BP's decision will enable Juneau to "fully focus on getting the remaining claims paid as quickly as possible."

(Reporting by Jonathan Stempel in New York; Editing by Leslie Adler)