James Hardie victims handed a $360 million lifeline

MILLIONS of dollars will be poured into the near-empty fund for James Hardie asbestos victims after a deal was struck between all Governments.

HUNDREDS of millions of dollars will be poured into the near-empty fund for James Hardie asbestos victims after a deal was struck between the Federal and State Governments.

A loan of $360 million will be used to overcome a shortfall in the fund which, if untended, would have left thousands of dying James Hardie staff or customers without assistance.

Last month The Daily Telegraph revealed the original $1.8 billion fund set up by James Hardie to pay compensation to asbestos victims was rapidly emptying. It was intended to pay victims more than $100 million a year - but as of last May there was just $140 million in the kitty.

The company had not contributed to the fund for two of the past three years.

Prime Minister Kevin Rudd is expected to announce today that the Federal Government will lend the NSW Government up to $160 million. Premier Nathan Rees will put the money towards a loan to the fund of up to $360 million, allowing the Prime Minister and Premier to guarantee that sufferers of asbestos-related diseases will continue to receive compensation from the Asbestos Injuries Compensation Fund, including payments for high up-front medical expenses and carer costs.

It is expected the money will be returned to taxpayers when James Hardie resumes its full payments into the fund.

Former James Hardie employee Bernie Banton - who died from asbestos-related mesothelioma in 2007 - became the public face of victims fighting for compensation.

But the fund was draining swiftly because James Hardie, formerly Australia's biggest asbestos producer, had not topped it up.

It has been accused of using a legal loophole by which the company could make either the needed contribution or 35 per cent of its "free cash flow".

"That's great news. There were some fears among some of the (victims') groups," Asbestos Diseases Foundation president Barry Robson said last night.

Mr Robson said he was confident after meeting the new James Hardie Board earlier this year that the company would resume its contributions as the global economy improved.

"There was a feeling in the room that things had changed from the old board," he said. "My group saw that there was a change of attitude."

Had the fund shrunk further, court action might have been triggered to slice the compensation payments even thinner, Mr Robson said.