(Adds background on issue, paragraphs 2, 7-8; on Goodlatte, paragraph 6; on Brown, paragraph 9)
WASHINGTON, April 9 (Reuters) - A U.S. congressman has urged the U.S. commodity regulator to take a tougher stance on the London Metal Exchange as it struggles to resolve a years-long controversy over inflated prices and distorted supplies of aluminum.
The comments - his first in public - show that the issue that has drawn political, legal and regulatory scrutiny for the past year has a growing support base, with end-users finding new allies on Capitol Hill to press their case.
Bob Goodlatte, who chairs the House Judiciary Committee, was speaking as a member of the House Committee on Agriculture, which adopted a bill to rewrite the rules governing the Commodity Futures Trading Commission.
"The CFTC acknowledges that they have the authority to regulate and investigate concerns about the aluminum supply," said Goodlatte, a Virginia Republican.
"End-users are concerned that the CFTC has been slow in taking action and looking into their concerns."
As head of the Judiciary Committee, Goodlatte has the ability to delve into issues ranging from mergers to competition in industry.
Aluminum users, including MillerCoors which uses the metal for its beer cans, have accused warehouses and their owners including Wall Street banks Goldman Sachs Group and JPMorgan Chase & Co and major merchants of distorting aluminum supplies and inflating prices through excessive stockpiling.
The issue has plagued the industry for years, but captured public and political attention last year. The Department of Justice and CFTC are looking into the issue.
Senator Sherrod Brown, an Ohio Democrat who has led the charge in Congress against banks' involvement in the physical commodity business, called on the CFTC to take an aggressive stance on the issue earlier this year.
Goodlatte chairs the House Judiciary Committee, which has also looked into the matter, according to a Committee aide, and has met with representatives of the aluminum industry. The lawmakers' panel, which oversees the Justice Department, did not however at this moment plan to hold a hearing.
Facing intense regulatory scrutiny, the LME has announced sweeping measures to help ease the backlogs, but some market participants are still pushing for U.S. regulators and politicians to take up the fight for even tougher oversight of the world's oldest and biggest metals market and its warehousing network.
Goodlatte's remarks came at a meeting at which the House Committee on Agriculture adopted a bill to adjust the CFTC's mandate and several of its rules, a process known as reauthorization that roughly takes place every five years.
However, he withdrew an amendment to the bill that would have required the CFTC to report in a year's time to account for its oversight of aluminum markets. In return, the panel vouched to keep a close eye on the issue.
The bill now needs to go to the House floor, but few policy watchers expect it to become law because President Barack Obama's administration opposes the changes. That means the Democrat-led Senate is unlikely to pass it.
The LME, owned by Hong Kong Exchanges and Clearing Ltd , is regulated by the UK's Financial Conduct Authority (FCA), but the CFTC holds sway over its U.S. business. (Additional reporting by Aruna Viswanatha in Washington and Josephine Mason in New York; Editing by Diane Craft and Eric Walsh)