“The advice that I’m getting from my experts at the moment is that it is looking like demolition will be what is recommended,” Ms Gallagher said, after meeting on Monday taskforce head Andrew Kefford, who will finalise his advice to Government within about a fortnight.

Ms Gallagher stressed the decision to demolish had not yet been taken, and a number of decisions would flow from it, including “who pays, how is it going to be managed, where is it going to be dumped”.

She was speaking after updating the Assembly on the asbestos insulation crisis, in a sitting on Tuesday morning attended by 50 or more Mr Fluffy homeowners, with stories both familiar and very personal, most if not all expecting demolition, and some in desperate situations.

Marlene Kasurinen says she is facing financial ruin after her retirement plans were blown away by the Mr Fluffy asbestos crisis this year. In January, she and her husband took out a $130,000 loan to pay debt and fix up her Duffy home for sale, with plans to retire to a farm in Tuena.

Mrs Kasurinen says one of her two daughters was murdered in 2001 and the decision to finally leave behind the home in which her children were brought up wasn’t easy.

Her house was put on the market in February, but the buyer offered $200,000 less than the $800,000 asking price once they discovered it was a Mr Fluffy house. With the sale fallen through, Mrs Kasurinen, in tears, said she could not find the money to pay her bank loan, with a repayment due this week.

"I don't know what to do any more. We are going to lose our home and we are going to lose the farm that we were going to retire to," she said. "I have rung the taskforce. I have begged for help.”

Having been through the original clean-up of the asbestos, during which she had to move her family out of the house, she understood the stress families were facing now, she said. She had believed her house clean and safe after the clean-up and had been devastated to discover this year it was not.

Testing had identified asbestos in a couple of locations but she and her husband were still living in the home, which had not been remediated, unsure what to do.

Another home owner, David, who did not want his last name used, has been a victim of conflicting testing. The first test of his Curtin home in April brought reassurance, when assessors told him his renovated house was in very good condition, the ceiling was clear of asbestos, and fibres were found only in the sub-floor.

Seeking peace of mind after reports of conflicting tests, David sought testing of the living areas in June, and has just received results showing asbestos contamination. The contamination comes despite substantial renovations of the home since he and his partner bought it two years ago.

"No matter how well looked after your home is, no matter how well it's been renovated, somehow this stuff will find its way in," he said. “Don't underestimate the power of this stuff finding its way into living areas.”

He came close to leaving immediately, he said, and believes demolition is the only answer.

Karl Smith's Rivett home is tenanted, and he only discovered it was a Mr Fluffy house after the second letter, sent by registered post, reached the managing real-estate agent in July. The previous tenants had moved out in May and new tenants, with a child, were about to move in. He had cancelled the tenancy.

Mr Smith bought the house in 2003, just after the bushfires, and his three children, the youngest only two, were all born there before he bought a bigger family home in 2012 and rented the Rivett house out. Mr Smith said the original sale documents said asbestos had been removed from the home and he had believed that a good thing.

No one had said anything when he had had rockwool insulation installed in the wall cavities in 2004, and he looks back at years of living in the house and crawling under the subfloor with no hint of the dangers.

He is still waiting for an assessment to be scheduled so he can tell the former owner and the tenants, but he’s a low priority for an assessment given the house in empty. “It’s empty and it’s just there till it’s knocked down,” he said.

Ms Gallagher told the families in the public gallery that she was acutely aware of their distress and upheaval.

“It is very clear that the Commonwealth-designed program which attempted the original removal of Mr Fluffy asbestos did not work,” she said. “Twenty years on, some Canberra families have raw pure asbestos fibres inside their homes, in their linen press, in their wardrobes, on their fridge, in their heating ducts, on their pillows and carpets, even on their children’s teddy bears.

“We cannot get this wrong again, and it is time for the ACT Government and the Commonwealth Government to join forces to provide an enduring solution to this problem.”

To date, 1800 people had registered with the taskforce and 27 families had been forced from their homes, she said. Of the more than 1000 registered post letters, 850 had been received, and the taskforce was working to contact remaining owners who had not registered. About 80 assistance payments had been made, totalling $140,000.