By Laura L. Myers

SEATTLE, Oct 24 (Reuters) - "Millennium bomber" Ahmed Ressam, whose original 22-year prison term was deemed too lenient by a U.S. appeals court, was re-sentenced to 37 years behind bars on Wednesday for a foiled New Year's Eve 1999 plot to set off explosives at Los Angeles International Airport.

Federal prosecutors who appealed the original punishment had asked the Seattle-based U.S. district judge presiding over the case to impose a new sentence that would require Ressam, an Algerian national, to spend the rest of his life in prison.

They argued Ressam deserved a much harsher penalty because he had reneged on an agreement to assist in the prosecution of other suspected militants and later recanted all his testimony and other statements to authorities.

By doing so Ressam, 45, demonstrated he would remain a threat to society once released from prison, prosecutors said.

But U.S. District Judge John Coughenour ruled that while a stiffer sentence was called for, a life term was not warranted under the circumstances.

"This case provokes our greatest fears ... but fear is a foul ingredient for sentencing calculations," the judge said before adjusting Ressam's sentence to 37 years in prison plus five years of supervised release.

Ressam, wearing a beige prison uniform, sat quietly in court with his arms folded during most of the proceedings. As the sentence was pronounced, he cupped his chin in his hand, his forefinger extended across his lips. He did not address the court, except to say, "Yes, your honor," when the judge asked if he understood.

Ressam's lawyers had urged a sentence of 30 to 34 years, arguing this was close to the 35-year term prosecutors previously recommended and on par with the statutory maximum penalty carried by the core offenses for which Ressam was convicted - an act of terrorism through the use of explosives.

They further argued that Ressam should still get credit for valuable information he did provide to authorities, including testimony against a convicted co-conspirator.

Ressam also identified Zacarias Moussaoui, a convicted Sept. 11 conspirator, as an individual he met at a militant training camp in Afghanistan, and gave information leading to the arrest of al Qaeda operative Abu Zubaydah, according to the defense.

'JUDGE ME AS YOU WISH'

In a statement filed in court last week, Ressam repeated his retraction of all previous statements, saying a deal to cooperate was made under duress.

He also insisted he was "against killing innocent people of any gender, color or religion," adding, "I apologize for my action." He concluded by saying, "You can judge me as you wish, I will not object to any of your sentences."

Defense lawyers have suggested that severe mental stress Ressam suffered from seven-plus years in solitary confinement at the "Supermax" federal prison in Florence, Colorado, may have influenced his decision to recant.

Ressam was arrested in December 1999 as he attempted to cross into the United States from British Columbia and aroused the suspicion of a U.S. customs inspector at a ferry landing in Port Angeles, Washington.

After he tried to run away, the trunk of his rental car was found packed with explosives capable of producing a blast 40 times greater than that of a typical car bomb, authorities said.

A jury convicted him in April 2001 of nine felony counts for his role in a plot to set off the explosives at Los Angeles International Airport on Dec. 31, 1999.

He was originally sentenced in 2005, and again in 2008, to 22 years in prison plus five years of supervised release.

Prosecutors, angry that Ressam had by then ceased cooperating, appealed the penalty as falling far short of the prison term called for under U.S. sentencing guidelines.

A divided 11-judge panel of the 9th U.S. Circuit Court of Appeals agreed in March, and by a 7-4 vote ordered the case sent back to Coughenour for re-sentencing.

Ressam is likely to be about 63 years old by the time he is released from federal prison under the new sentence, accounting for time already served, defense lawyer Thomas Hillier said.

Defense lawyers said in their pre-sentencing memorandum that Ressam faces deportation back to Algeria and likely further imprisonment there once released from U.S. custody. They also said he would most certainly be a marked man, viewed by groups like al Qaeda as a traitor for his initial cooperation with U.S. authorities.

U.S. Attorney Jenny Durkan told reporters after re-sentencing that she would review the judge's opinion in full before deciding whether to appeal the latest prison term.

But she called the additional time Ressam received "a significant increase," and said, "Today is a victory for the rule of law and our country's system of justice." 

(Additional reporting by Steve Gorman)

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