Mr Fluffy asbestos residents welcome billion-dollar Commonwealth demolition, compensation deal

Canberra residents affected by the Mr Fluffy asbestos crisis have welcomed a Federal Government deal to resolve the situation.

The ACT Government has agreed to accept a concessional loan of $1 billion from the Commonwealth to help pay for the demolition of more than 1,000 properties affected by potentially deadly loose-fill asbestos.

Meanwhile a report by the Asbestos Response Taskforce on the Long Term Management of Loose Fill Asbestos Insulation in Canberra Homes found there to be "no effective, practical and affordable method to render houses containing loose-fill asbestos insulation safe to occupy in the long term".

The taskforce listed three possible options for Mr Fluffy homes but warned demolition was the only "enduring solution to the health risks posed by the presence of loose-fill asbestos ... and their attendant social, financial and practical consequences".

An estimated 1,021 homeowners across Canberra have been waiting for news of a possible compensation package after a warning was issued in February that their homes could still contain potentially deadly asbestos fibres.

Under the deal, the Territory Government would pay back up to 70 per cent of the loan by selling off some of the cleared blocks of land.

Chief Minister Katy Gallagher said the proposed buy back and demolition scheme would start next year following discussions with homeowners and take approximately five years to complete.

"The Commonwealth will provide a loan facility which allows us to enter in to individual agreements with the home owners, to buy back and clear the blocks," she said.

"We expect there will be a big hit next year in our budget as we acquire 1,000 homes and have to adjust that on our balance sheet."

The ACT Government said it would have liked the original Memorandum of Understanding signed 20 years ago with the Commonwealth on the Mr Fluffy homes to have been adhered to.

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Mr Fluffy asbestos residents welcome billion-dollar Commonwealth demolition, compensation deal