Red Hill Nature Reserve is the latest victim of previous dumping of rubbish, with old buried asbestos now breaking through the surface of the ground.
The ACT government confirmed yesterday that $180,000 allocated in this week's budget would be used for rehabilitation works after old dumped rubbish including asbestos was reaching the ground surface.
A spokesman for Territory and Municipal Services said parts of Red Hill were used as a suburban dump site before self-government.
''When this dump was discontinued, an earth cap was deposited over the dump to ensure buried material did not come to the surface,'' he said.
''Environmental monitoring has revealed that this capping is starting to fail in various locations and a variety of dump material, including asbestos, is now coming to the surface.''
The rubbish had broken through on a few occasions and had been removed.
The funding would allow the planning and start of works to ensure the area was secured and made safe.
A spokeswoman for Chief Minister Katy Gallagher said: ''This is another example of the ACT government being left with the burden of managing issues created by the Commonwealth government's management of the ACT prior to self-government.''
The Canberra Times revealed this week that the ACT government was preparing to sue the Commonwealth for tens of millions of dollars spent cleaning up asbestos dumped before self-government. However, a spokeswoman for Regional Australia Minister Simon Crean said that the contamination was a matter for developers and the ACT government. Megan Doherty