A federal bankruptcy judge in Pittsburgh yesterday approved an agreement for W.R. Grace & Co. to reimburse the federal government $250 million for the investigation and cleanup of asbestos contamination in a Montana town.

The Columbia, Md.-based chemical maker agreed to the amount in March to settle a bankruptcy claim brought by the government to recover money for the past and future cleanup of contaminated schools, homes and businesses in Libby, Mont.

The contamination has been blamed for sickening hundreds of people, some of whom have died.

According to an order signed by U.S. Bankruptcy Judge Judith K. Fitzgerald during a hearing in Pittsburgh, Grace must pay the amount within 30 days.

The settlement would be the largest-ever reimbursement through the government's Superfund program, the U.S. Environmental Protection Agency and the Justice Department have said.

James D. Freeman, a Justice Department attorney, said the settlement was a "substantial compromise" for the government, but the prompt payment would allow the cleanup to continue without budgetary concerns.

Taxpayers have been footing the bill for the EPA's investigative work and cleanup in Libby, which began in 1999. An EPA official in Libby said in March that expenses totaled $168 million and another $175 million in costs were likely.