Specialty chemicals firm W.R. Grace & Co. has agreed to pay the federal government a record US$250 million for cleaning up asbestos contamination in Libby, Montana, the Justice Department and Environmental Protection Agency said Tuesday. The agreement settles a federal bankruptcy claim over the Libby clean up, and a department official said it was the largest cash recovery under the Superfund law for cleaning up polluted sites. The EPA has been removing asbestos contamination in Libby, where Grace operated a vermiculite mine, since 2000. The vermiculite ore was contaminated with the carcinogen asbestos. Grace filed for bankruptcy protection in 2001, and the EPA filed a bankruptcy claim in 2003 to recover its costs. (Reporting by Randall Mikkelsen, editing by Todd Eastham and Eric Beech REUTERS NEWS SERVICE