NEW ORLEANS (July 19) -- A seep near the oil well that had been spewing into the Gulf of Mexico is adding a new twist to a disagreement between BP and the government over what to do next now that the oil has been capped.

The government's point man for the spill, retired Coast Guard Adm. Thad Allen, said late Sunday the seep had been detected a distance from the busted oil well and demanded in a sharply worded letter that BP step up monitoring of the seabed. Allen didn't say what was coming from the seep.

The concern all along - since pressure readings on the cap weren't as high as expected - was a leak elsewhere in the wellbore, meaning the cap may have to be reopened to prevent the environmental disaster from becoming even worse and harder to fix.

"When seeps are detected, you are directed to marshal resources, quickly investigate, and report findings to the government in no more than four hours. I direct you to provide me a written procedure for opening the choke valve as quickly as possible without damaging the well should hydrocarbon seepage near the well head be confirmed," Allen said in a letter to BP Managing Director Bob Dudley.

When asked about the seep and the monitoring, BP spokesman Mark Salt would only say that "we continue to work very closely with all government scientists on this."

BP said Monday that the cost of dealing with the oil spill has now reached nearly $4 billion. The company said it has made payments totaling $207 million to settle individual claims for damages from the spill along the southern coast of the United States. To date, almost 116,000 claims have been submitted and more than 67,500 payments have been made, totaling $207 million.

With the newly installed cap keeping oil from BP's busted well out of the Gulf during a trial run, this weekend offered a chance for the oil company and government to gloat over their shared success - the first real victory in fighting the spill. Instead, the two groups have spent the past two days disagreeing over what to with the undersea machinery holding back the gusher.

The apparent disagreement began to sprout Saturday when Allen said the cap bottling up the oil would eventually be hooked up to a mile-long pipe to pump the crude to ships on the surface. But early the next day, BP chief operating officer Doug Suttles said the cap should shut the oil in until relief wells are finished.

After nearly three months of harsh criticism as it tried repeatedly to stop the leak, BP PLC capped the nearly mile-deep well Thursday and wants to keep it that way. The government's plan, however, is to eventually pipe oil to the surface, which would ease pressure on the fragile well but require up to three more days of oil spilling into the Gulf.

Both sides played down the apparent contradiction Sunday. Allen, ultimately the decision-maker, later said the containment plan he described Saturday hadn't changed, and that he and BP executives were on the same page.

The company very much wants to avoid a repeat of the live underwater video that showed millions of gallons of oil spewing from the blown well for weeks.

"I can see why they're pushing for keeping the cap on and shut in until the relief well is in place," said Daniel Keeney, president of a Dallas-based public relations firm.