JAKARTA, Dec 2 (Reuters) - About 500 people made homeless by a mud volcano in Indonesia's East Java held a rally in the capital on Tuesday to protest against delays in compensation by an energy firm blamed by some scientists for the disaster.

The mud volcano, which started erupting in May 2006 near Indonesia's second-biggest city of Surabaya, has inundated 12 villages and displaced more than 50,000 people.

Some scientists have said that energy firm PT Lapindo Brantas' drilling for a gas exploration well set off the mud volcano. Lapindo has denied it is to blame, saying the mud disaster was triggered by tectonic activity.

But the government has ordered Lapindo to pay 3.8 trillion rupiah ($310.2 million) in compensation to the victims.

"We need them to pay up so we can rearrange our lives again," said Lusita Wiji Lestari, one of the protesters outside the presidential palace in Jakarta.

Lapindo is linked to the Bakrie Group, controlled by the family of Chief Social Welfare Minister Aburizal Bakrie, who earlier this year was named as Indonesia's richest man.

Lapindo was due to pay 80 percent of the compensation by this month after paying 20 percent last year.

President Susilo Bambang Yudhoyono last week called on Nirwan Bakrie, the younger brother of the welfare minister, to pay some victims who had not received the 20 percent payment.

A spokesman for the protesters, Wisnu Aji, said Lapindo had recently offered 15 million rupiah ($1,255), but said the amount was too small to pay for a new house.

Yuniwati Teryana, a Lapindo spokeswoman, said it would pay the rest "gradually", without elaborating.

"We cannot deny that in this global financial crisis situation, the company is suffering a decrease of productivity and performance so the payment is a bit slow," she said in a telephone text message.

The Bakrie group, whose interests span energy, property and telecoms, has been struggling to raise money in order to repay about $1.2 billion of debt.

Indonesian vice president Jusuf Kalla said in September the government had given up all hope of halting the mud. ($1=11950 Rupiah) (Reporting by Olivia Rondonuwu; Editing by Ed Davies and Paul Tait)

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