W.R. Grace & Co. has agreed to reimburse the federal government $250 million for the investigation and cleanup of asbestos contamination blamed for sickening hundreds of people, some fatally, in the northwestern Montana town of Libby.

Approval of a federal bankruptcy judge is necessary to cement the agreement announced Tuesday by the U.S. Justice Department, which said $250 million is a record sum for reimbursement through the government's Superfund environmental cleanup program.

Taxpayers have been footing the bill for the U.S. Environmental Protection Agency's investigative and cleanup work in Libby, where the agency arrived in 1999. Expenses total $168 million and another $175 million in costs are likely, said Paul Peronard, EPA's Libby project leader.

Sen. Max Baucus, a Montana Democrat, called $250 million "a drop in the bucket compared to the destruction and pain our neighbors in Libby have been through."

Asbestos came from the vermiculite mine and processing facilities, a few miles from Libby, that Grace owned and operated from 1963 until the site's closure in 1990. Vermiculite was used in a variety of products and the asbestos was dispersed in a variety of ways.

Workers carried it home on their clothing. Asbestos also ended up in the yards of homes where vermiculite was spread as a soil conditioner. Exposure in Libby has been blamed for lung-scarring asbestosis and for mesothelioma, a fast-moving cancer that attacks the lungs.