I think you can do this with a material event function.

Code:

function mtl_Event()
{
my.material=mat_norm;
  if(vec_dist(my.x,render_view.x)>lodfactor[0]*render_view.clip_far)
{
   my.material=mat_lod1;
}
if(vec_dist(my.x,render_view.x)>lodfactor[1]*render_view.clip_far)
{
   my.material=mat_lod2;
}
if(vec_dist(my.x,render_view.x)>lodfactor[2]*render_view.clip_far)
{
   my.material=mat_lod3;
}
}

material mat_norm
{
   event=mtl_Event;
   enable_render=on;
}
....


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