Lloyd's has dubbed a bizarre clause in the US Bankruptcy Reform legislation as a “get out of jail free” card that could allow every US citizen and company to escape paying debts incurred overseas between 1973 and 1993.

Section 1310 was specifically added to the bill to let disgruntled US Names launch fresh legal cases against Lloyd's.

But Lloyd's is leading a lobbying campaign to drop the clause, claiming that it effectively allows any US citizen or business, not just rebel Names, to escape payment of debts incurred overseas.

The Confederation of British Industry is also putting pressure on Congress to ditch the clause, which has come to prominence because of the change in presidency.

It was slipped into a compromise version of the bankruptcy bill last year and passed by the House and Senate. But it received little attention then, as former president Bill Clinton vetoed the bill.

However, new President George W Bush is expected to sign the bill. Lloyd's fears that the legislation would allow investors who incurred underwriting losses in the 1980s and 1990s to renew their claims against London.

Adrian Beeby, media relations manager at Lloyd's, believes it could have a wider impact.

He said: “This is a badly conceived and unjust piece of legislation that will have repercussions around the world and damage the US's business relationships with other nations.

“Any insurer or broker trading within the US will have problems if this goes through. It is a shield for debtors.

“In effect, this provision could provide a ‘get out of jail free' card to any US citizen or business seeking to escape payment of debts incurred overseas.”

Most Names agreed to the 1966 reconstruction and renewal settlement that was brokered by Lloyds after the market was hit by mass of unforeseen asbestos-related liability claims.

But a group of Names challenged the deal, saying Lloyd's coaxed them into taking these major losses.