NEW YORK, Nov 22 (Reuters) - Freelance writers seeking compensation from publishers for the reprinting of their work in online databases without permission asked a court on Friday to approve a revised settlement that would remove a cap on the compensation they could receive.

The proposed deal came after the 2nd U.S. Circuit Court of Appeals in New York threw out an earlier settlement in 2011 as unfair because it shortchanged authors who did not register copyrights on their works. Those authors represented more than 99 percent of the claims.

In the newly drafted agreement, signed by all the parties involved except one company going through bankruptcy, the original $18 million settlement cap will be eliminated on what writers can receive for their archived work, which includes articles that go back to the 1980s.

"The revised settlement provides a substantial benefit: millions of dollars in cash payments to class members who submitted valid claims," said the filing with the U.S. District Court for southern New York.

Publishers in the lawsuit included Reed Elsevier , New York Times Co, News Corp's Dow Jones & Co, Thomson Reuters Corp and Knight Ridder, which was bought by McClatchy Co in 2006.

Defendant Cengage Learning, formerly known as the Gale Group, is in bankruptcy proceedings and needs approval from the bankruptcy court to enter into the agreement, the document said.

The original 2005 settlement, reached through mediation, came four years after the Supreme Court said publishers violated copyright law when they reproduced freelance works electronically without obtaining permission from copyright owners. That settlement capped the amount that writers who had not copyrighted their work could collect.

A group of authors who had not registered their works objected, saying the cap unfairly reduced the compensation they could recover.

Charles Chalmers, a lawyer for the authors, said on Friday the exact number of writers who will benefit from the deal is unknown since many of the publishing companies did not keep good records of the freelancers who worked for them over the years.

"What we do know is there are not going to be any new claims," Chalmers said, adding about 3,000 authors were covered by the original deal.

He said he did not expect the claims to exceed $19.5 million, but it was too soon to know the amount of the final settlement.

If the deal is approved without objections, payments could go out sometime next year, he said.

Charles Sims, one of the attorneys representing the publishers, did not respond to a request for comment.

The case is In re: Literary Works in Electronic Databases Copyright Litigation, U.S. District Court Southern District of New York, No. 1:00-md-01379-GBD.