Restrictions on a demolition contractor accused of ransacking Mr Fluffy homes for reusable goods will be lifted on Monday, despite the company still being subject to a police investigation.
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Queensland-based company CaylaMax Recycling was forced to suspend some aspects of its demolition work in May, after allegations emerged about the theft of goods.
A photo of a cabinet belonging to a Mr Fluffy home showed it sitting in a shipping container in a yard used by the company.
The cabinet was marked with red paint, similar to that used on furniture and fittings in Fluffy houses to ensure they are dumped, which is required because such items can be contaminated.
After being alerted to the issue by The Canberra Times, the government wrote to all 10 head contractors to warn them they must not reuse or resell anything from a Fluffy house.
They also stopped CaylaMax from removing abandoned furniture and fittings during ongoing demolition works.
On Thursday, the government revealed it would lift its restrictions on CaylaMax from Monday.
That is despite an ongoing police investigation, which was requested by the Asbestos Response Taskforce.
The taskforce issued a statement on Thursday, saying it had conducted an internal audit and was satisfied it could lift restrictions on the company.
The taskforce declined a request for that audit to be publicly released.
It also could not comment on whether any evidence of the reuse or resale of household items had been uncovered.
A new work practice will be implemented, following work with the company and Worksafe, that "would effectively prevent the removal of hard-surfaced abandoned furniture from affected houses".
"Hard furniture [like the cabinet central to the allegations made] will be disassembled and entirely sprayed with the same dyed bonding agent that the interior structure of houses is sprayed with before demolition," the statement said.
"The pieces of furniture will then be stored inside the affected house until demolition when they will be removed as part of the demolition waste and dumped."
Soft furnishings can still be removed as normal.
The taskforce will trial this approach, refining it if necessary, and expand it to all head contractors.
The cabinet at the centre of the investigation was tested and found not to be contaminated, the taskforce said.
Extra scrutiny and supervision of the handling of furniture will also be in place.
"Based on the conclusions of the internal audit, and the impact of the new work practice, the taskforce has decided to lift its contractual prohibition and permit CaylaMax to recommence the removal of abandoned furniture and fittings," a taskforce spokeswoman said.
The police investigation is expected to conclude shortly, the taskforce said.
Minister Mick Gentleman said on Thursday the internal investigation had recommended the contractor was able to continue with the work.
Police had advised that the contractor returning to work would have no impact on the investigation, Mr Gentleman said.
The Asbestos Response Taskforce appeared before a budget estimates committee on Thursday afternoon.
The committee heard that demolitions were tracking well ahead of schedule, with 233 houses being demolished.
In a normal week, roughly 12 houses were being demolished, the hearing heard.
The taskforce was about one-third of the way through the demolition process.
The hearing heard that of 4000 residents in houses, 235 people were aged over 75, and 535 were aged between 55 and 74.
