A pre-inquest hearing into the deaths of 21 people in attacks at two pubs in 1974 opened on Monday.
Last week marked the 42nd anniversary of the tragedy.
At the hearing in Birmingham, Coroner Peter Thornton QC said he supported the families' claim for legal aid, but had no powers to grant it.
The government said families who were represented by a legal firm in Northern Ireland were unable to claim legal aid until that firm enters "into an arrangement with an English or Welsh law firm".
Julie Hambleton, whose sister Maxine was one of those killed, said their Belfast-based lawyers deserved financial support.
In June it was confirmed that inquests into the deaths would be reopened after Coroner Louise Hunt said there was a "wealth of evidence that has still not been heard".
The Home Office rejected a request from some of the families to pay their legal fees in September, but others have been granted legal aid.
The next preliminary hearing has been set for 23 February to allow families at least six weeks to prepare the case if they receive funding.
Mr Thornton said the inquests could reopen from September 2017.
Mr Thornton said: "I have in mind the gravity of events, the scale of the number of deaths, the investigations to date, the complexity of the investigations and the need for the families' participation - which is very important.
"For those reasons I support the application for funding."
He also appealed to eight families who have never made contact with the city's coroner's office to do so if they wanted to be kept informed about the inquests.
Ms Hambleton said the government was "adopting a very parochial" approach, and welcomed the support of the coroner.
"If we don't get this funding that will mean that the imbalance of the scales of justice are so bent in one direction towards the state, the inquest cannot possibly move forward," she said.
Other funds used to help pay legal fees in other controversial cases could be used to support families, she added.
"The government have a discretionary fund all right. They gave this discretionary fund to the Bloody Sunday families... they gave this discretionary fund to the Hillsborough families," she said
"The English legal aid agency funded English lawyers to make a case in Northern Ireland for a civil case for some of the Omagh bombing families... so why oh why are we having to fight and beg with a bowl to get what everyone else has had?"
Lawyers for the families - from KRW in Northern Ireland - have been working for free, while legal teams for police and other government branches have been taxpayer-funded.
West Midlands Police has already set aside Â£1m to cover its legal costs.
In court on Monday was human rights lawyer Gareth Peirce, who is believed to be representing the surviving members of the Birmingham Six as well as representatives for West Midlands Police, the local Police Federation, and Devon and Cornwall Police.
The government had rejected a call from the families for a special funding model similar to that used in the Hillsborough Stadium disaster inquiry.
Instead, Home Secretary Amber Rudd backed the relatives making an application under existing arrangements through the Legal Aid Agency.
However, under rules governing the UK's separate legal jurisdictions, the families' Northern Ireland-based lawyers KRW Law would need to partner with an English law firm to secure legal aid.
A government spokesman said "our deepest sympathies remain with the families" and said the Legal Aid Agency (LAA) had been clear with KRW about how to "take this matter forward".
"Legal aid is a devolved matter and because KRW is based in Northern Ireland, it needs to enter into an arrangement with an English or Welsh law firm in order to receive legal aid funding.
"The LAA continues to urge KRW to do this so the families get the representation they want at the inquest."
Relatives of the Birmingham pub bombings victims have said they cannot understand why they are having to fight to get funding for their legal fees.