By Chris Baltimore and David Ingram 

HOUSTON/WASHINGTON, Nov 15 (Reuters) - BP Plc is expected to pay a record U.S. criminal penalty and plead guilty to criminal misconduct in the Deepwater Horizon disaster which caused the worst offshore spill in the country's history, sources familiar with discussions said.

They told Reuters that a plea deal with the Justice Department over the 2010 disaster, in which 11 workers died, may be announced as soon as Thursday.

London-based BP confirmed on Thursday that it was in "advanced discussions" with the Justice Department and U.S. Securities & Exchange Commission (SEC).

Three sources, who spoke on condition of anonymity, said BP would plead guilty in exchange for a waiver of future prosecution on the charges. The Justice Department declined to comment.

The sources did not disclose the amount of BP's payment for the explosion on the Deepwater Horizon rig in the Gulf of Mexico and leak from the Macondo oil well, but one said it would be the largest criminal penalty in U.S. history.

That record is now held by Pfizer Inc, which paid a $1.3 billion fine in 2009 for a marketing fraud.

BP said the talks were about "proposed resolutions of all U.S. federal government criminal and SEC claims against BP in connection with the Deepwater Horizon incident", but added that no final deals had been reached. Its shares were down 0.9 percent on Thursday morning.

The mile-deep Macondo well spewed 4.9 million barrels of oil into the Gulf over 87 days, fouling shorelines from Texas to Florida and eclipsing in severity the 1989 Exxon Valdez spill in Alaska.

The oil giant has been negotiating for months with the U.S. government and Gulf Coast states to settle billions of dollars of potential civil and criminal liability claims. A deal could resolve a significant share of the liability that BP faces.

BP, which saw its market value plummet and replaced its chief executive after the spill, still faces economic and environmental damage claims sought by four Gulf Coast states and other private plaintiffs.

A record fine would far outstrip BP's last major settlement with the Justice Department in 2007, when it payed about $373 million to resolve three separate investigations into a deadly 2005 Texas refinery explosion, an Alaska oil pipeline leak and fraud for conspiring to corner the U.S. propane market.

BP has sold over $30 billion worth of assets to fund the costs of the spill. Matching that, it has already spent about $14 billion on clean-up costs and paid out, or agreed to pay out, a further $16 billion on compensation and claims. The disaster has dragged it from second to a distant fourth in the ranking of top western world oil companies by value.

A week after the U.S. presidential election, a massive Deepwater Horizon settlement could prompt a debate in Congress about how funds would be shared with the Gulf Coast states, depending on how the deal is structured.

Congress passed a law last year that would earmark 80 percent of BP penalties paid under the Clean Water Act to Louisiana, Mississippi, Alabama, Florida and Texas.

POTENTIAL LIABILITY

In an August filing, the Justice Department said "reckless management" of the Macondo well "constituted gross negligence and willful misconduct" which it intended to prove at a civil trial set to begin in New Orleans in February 2013. The U.S. government has yet to file any criminal charges in the case.

Given that the deal will not resolve any civil charges brought by the Justice Department, it is also unclear how large a financial penalty BP might pay to resolve the charges, or other punishments that the company might face.

Negligence is a central issue to BP's potential liability. A gross negligence finding could nearly quadruple the civil damages owed by BP under the Clean Water Act to $21 billion in a straight-line calculation.

Still unresolved is potential liability faced by Swiss-based Transocean Ltd, owner of the Deepwater Horizon vessel, and Halliburton Co, which provided cementing work on the well that U.S. investigators say was flawed. Both companies were not immediately available for comment.

According to the Justice Department, errors made by BP and Transocean in deciphering a pressure test of the Macondo well are a clear indication of gross negligence.

"That such a simple, yet fundamental and safety-critical test could have been so stunningly, blindingly botched in so many ways, by so many people, demonstrates gross negligence," the government said in its August filing.

Transocean disclosed in September that it is in discussions with the Justice Department to pay $1.5 billion to resolve civil and criminal claims.

BP has already announced an uncapped class-action settlement with private plaintiffs that the company estimates will cost $7.8 billion to resolve litigation brought by over 100,000 individuals and businesses claiming economic and medical damages from the spill.

(Additional reporting by Andrew Callus)

Follow us on Twitter @ReutersLegal | Like us on Facebook