Wall Street's biggest banks could be broken up by the Congress in the coming year in an eventual reckoning over the financial meltdown of 2008, Liar's Poker author Michael Lewis said on Tuesday.

Lewis, promoting his latest book The Big Short: Inside the Doomsday Machine about the crisis, predicted a war will be waged in Washington as Senate Banking Committee Chairman Christopher Dodd tries to revamp U.S. financial rules.

Things can be busted up. I really think there is this collision coming that is just starting to happen with the Dodd bill, Lewis said. There is a war that is about to happen over not just who regulates Wall Street but what the rules are.

To put it in the crudest possible way, these firms have to be smaller and less profitable, Lewis told Reuters. If they were regulated properly and the rules of their game were sane, it would be less profitable to be a trader at a big Wall Street firm ... It is really a war over money.

The new book by Lewis, who exposed the culture of excess at Salomon Brothers in Liar's Poker, recounts the meltdown through the prism of a few Wall Street players who spotted flaws of the U.S. subprime mortgage market and made fortunes betting against it.

Lewis said he wants to make amends for his 1989 bestseller, which he wrote as a cautionary tale but instead was seen by many as a guidebook for the greed-is-good set.

All these people who created the crisis went to (work on) Wall Street because they read 'Liar's Poker', he said. And many of them told Lewis it was why I got into the business.

MOTLEY OUTCASTS

The Big Short follows a motley group of outcasts who profited from the collapse of the subprime market.

There's the one-eyed doctor-turned-money-manager with Asperger's Disorder and a penchant for reading regulatory filings and the lazy fund manager with a comic book obsession mourning the loss of a young son.

There's a bond trader with hair like Gordon Gekko in the 1987 film Wall Street and a personality to match, plus two geeks working in a garden shed with a $110,000 brokerage account.

I could have picked others who were equally odd, said Lewis, noting nearly all of Wall Street was on the wrong side of the biggest trade of all time and the establishment failed to see disaster coming.

Wall Street actually has a conformity problem. It's sort of like a mono-culture.

While the image of Wall Street in the 1980s might appear less diverse than it is today, in fact the thinking is more conformist and people are less capable of seeing their own errors, Lewis said.

At these firms there is much less personal diversity, he said. It is now much more friendly to women and people who are not white, and yet it is much more homogenous.

Wall Street's monolithic thinking of today could well be an unfortunate by-product of Liar's Poker, in which Lewis said he reveled in the eccentricity of Salomon Brothers.

Liar's Poker drew such attention to the 1980s Wall Street culture, he said, that it led people to ask: Why you are making all that money?

And the preservation of the money was the most important thing, Lewis said.

Like his other books, The Big Short has been well received. The New York Times reviewer Michiko Kakutani wrote that Lewis does a nimble job of using his subjects' stories to explicate the greed, idiocies and hypocrisies of a system notably lacking in grown-up supervision.

Reuters' blogger Felix Salmon called it probably the single best piece of financial journalism ever written.

Lewis said his next project is writing a sequel to 2003's Moneyball, his book about baseball.

(Editing by Ellen Wulfhorst and John O'Callaghan)