The ACT's Asbestos Response Taskforce has apologised to Mr Fluffy victims for the flood of media speculation over a Federal Cabinet decision to assist the ACT.
Taskforce head Andrew Kefford emailed Mr Fluffy residents on Tuesday morning to apologise for distress caused by the reports, emphasising that the ACT Government has not yet received a formal offer from the Commonwealth.
A mass buy-back and demolition of the Mr Fluffy homes appears a step closer, with ACT Chief Minister Katy Gallagher due to meet the Commonwealth on Tuesday to discuss an offer for what is reported to be a loan of up to $1 billion to cover the cost.
Ms Gallagher stressed she had yet to receive an offer from the Commonwealth, but confirmed the federal government had sought talks on Tuesday.
"We know these have been incredibly difficult times for families living with the legacy of Mr Fluffy and hope we will be able to bring about a speedy resolution for them," Ms Gallagher said.
"As soon as there are further developments, we will contact the homeowners."
Mr Kefford wrote directly to homeowners saying "You may have read or heard coverage this morning of an offer from the Federal Government to the ACT towards the cost of buying back and safely demolishing Mr Fluffy homes.
"I apologise if this coverage causes distress. It did not originate from the ACT Government and as yet we have not received a formal offer from the Commonwealth," he wrote.
"We know these have been incredibly difficult times for families living with the legacy of Mr Fluffy and hope we will be able to bring about a speedy and enduring resolution for you."
A meeting of federal Cabinet on Monday looks to have been the breakthrough the 1000 Fluffy owners have been waiting almost nine months for, since they received a letter warning their homes were likely to contain remnant fibres from the deadly loose-fill asbestos insulation pumped into ceilings in the 1960s and 1970s. More than 40 families are living in temporary accommodation, forced from their homes by dangerous levels of contamination.
Ms Gallagher is now considering a mass demolition of the homes and clean-up of the land, a program that would be the biggest ever spend by a territory government at up to $1 billion. Ms Gallagher wants to recoup some of the costs by selling the cleaned land and has suggested the Commonwealth should pay two-thirds of the cost under a two-for-one memorandum signed during the clean-up of the late 1980s. But a low-interest loan has also been on the table, and the ABC reports that a loan is the option chosen by the Commonwealth.
The Fluffy Owners and Residents' Action Group spokesperson Brianna Heseltine said owners had a "firm expectation" that the Commonwealth government would honour a memorandum of understanding and pay two thirds.
Families had "endured a long and anxious wait", she said, and wanted significant emergency funding from the Commonwealth to help the ACT government bring an end to the Mr Fluffy disaster.
"In the case of natural disasters, the Commonwealth reimburses the states for up to 75 per cent of reconstruction costs ... A manmade disaster should attract the same level of relief," Ms Heseltine said.
"In 1968, the Commonwealth government had the chance to shut down Mr Fluffy and avert this entire disaster. It failed to do that. As a result, over the next decade Mr Fluffy went on to pump asbestos insulation into more than 1100 homes in Canberra and Queanbeyan. The Commonwealth government could have averted this entire disaster if it had acted on its own advice."
The failed clean-up had left the ACT government with an "utterly ineffective and over-priced removal program", she said, pointing to advice to the Commonwealth in 1988 that the only way to address the health risk was through the "complete removal" of asbestos from the homes.
"It defies belief that the past Commonwealth government thought any removal program could fully remove all of the microscopic fibres and thereby actually address the health risks. Worse still, governments were warned after the program had commenced that fibres remained in homes that had been cleaned," Ms Heseltine said.
The asbestos was pumped into ceilings before self-government under the Commonwealth's watch, and the Commonwealth funded the failed clean-up of the late 1980s, when the bulk of the material was removed from ceilings. It has now been discovered that dangerous fibres remain in walls and sub-floors.
Federal Employment MInister Eric Abetz would not discuss the decision on Tuesday morning.
But the two governments will talk later in the day, bringing a resolution closer.
Ms Gallagher has said she wants a demolition program to take account of the different wishes of Fluffy homeowners, some of whom want the right to buy back their land and rebuild, and others who don't want their home demolished at all. It is unclear to what extent she will be able to accommodate these wishes, given she has also said she wants to recoup as much as she can from land sales to help pay for the program, and given the danger of leaving some homes still standing, a danger that goes beyond people living in them to people visiting and working in the homes.