Jan 24 (Reuters) - Delaware plans to reject a wide-ranging settlement between state and federal agencies and top U.S. banks to resolve allegations of mortgage abuses, a top official in the state said on Tuesday.

Attorney General Beau Biden "is opposed to the settlement as currently drafted," Deputy Attorney General Ian McConnel said in a phone interview.

"This should come as no surprise given his prior public comments about the settlement process," McConnel added.

As talks between the banks and state attorneys general and several federal agencies have stretched into their second year, states including Delaware, New York and California have said the proposed deal released the banks from too many claims and did not provide enough relief to homeowners.

The banks - Bank of America, Wells Fargo & Co, JPMorgan Chase & Co, Citigroup and Ally Financial Inc - are expected to provide $20 billion to $25 billion of relief to homeowners, including principal reduction on loans, people familiar with the matter have said.

In exchange, they will put behind them potential government lawsuits about improper foreclosures and abuses in originating and servicing mortgage loans.

The total value of the settlement will depend on how many states decide to join the settlement.

Government negotiators met with Democratic state attorneys general on Monday in Chicago to discuss the settlement, and briefed Republican state attorneys general in a conference call.

In a statement on Monday, Iowa Attorney General Tom Miller, who is leading the talks for the states, said "we have not yet reached an agreement with the nation's five largest servicers, and we won't reach a settlement any time this week."

In an interview, McConnel said he could not comment on any specific objections, but would do so once the settlement is made public.

The Delaware decision was first reported by Bloomberg.

(Reporting by Aruna Viswanatha)

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