administrative-law judge recommended a drilling permit with a security bond of $225 million against possible oil spills from its Gulf of Mexico plan, far less than the $4.25 billion the state wanted.

Coastal Petroleum, a subsidiary of a Bermuda-based company, said Florida has 45 days to challenge the judge's recommendation.

Coastal, which has been seeking to drill in the St. George Island prospect off Florida's Panhandle since 1992, has met fierce resistance from Florida officials, whose state depends heavily on its beaches and coastline for tourism revenue.

The company is "pleased'' with Judge Mary Clark's recommendation, said Phillip Ware, Coastal Petroleum president, in a statement.

Coastal Petroleum obtained leases on 800,000 acres off Florida in the 1940s, long before the state imposed a ban on offshore drilling in its waters.

Federal courts have ruled that Coastal Petroleum has a right to drill.

Coastal Petroleum is a subsidiary of Coastal Caribbean Oils & Minerals Ltd., a publicly traded company based in Bermuda.

Coastal Caribbean shares rose 1/2 to 3 1/8.