The London Metal Exchange (LME) has suspended the validity of 274 steel billet warrants belonging to bankrupt brokerage firm MF Global , an exchange spokesman said on Saturday.

The situation has arisen due to the MF administration. The administrator has taken control of the warrants and is unable to adhere to the Lending Guidance, LME spokesman Chris Evans said in an email statement to Reuters.

To ensure an orderly market we have suspended the warrants until the situation becomes clearer, he said.

The exchange stated that since it had reason to believe that the holder of the warrants is not prepared to comply with LME rules on lending guidance, the Warrants will not constitute live warrants for the purposes of calculating dominant positions under the Lending Guidance.

MF Global filed for bankruptcy in the United States after risky bets on debt from troubled euro zone nations scared away clients and investors.

The company revealed to regulators that it was short perhaps $600 million (373 million pounds) in customer funds - money which the firm was supposed to keep in segregated accounts maintained under a raft of laws and regulations.

Its Singapore unit said late on Friday that nearly half the $309 million held in its segregated client accounts are with financial institutions outside the city-state, indicating the difficulty faced by liquidators in retrieving customers' money.

(Editing by Robert Birsel)