Commonwealth clean-up of Mr Fluffy a failure before it was even half finished

But cost considerations prevented them from taking further steps to remove it – and a caveat was included on the certificate of removal to indicate remnant fibres could still be present in walls.

According to damaging revelations contained within an internal overview of the removal program written by a former head of the Asbestos Branch, Trevor Wheeler, inspectors from the CSIRO's division of building, construction and engineering pointed out flaws in the clean-up program midway through its completion.

The CSIRO was called in to assess progress at about 380 houses out of a total of 1084 homes.

In his 2005 report on the ACT 1988-1993 Asbestos Removal Program, Mr Wheeler noted it quickly became apparent to inspectors that loose amosite had fallen down the internal wall cavities to the first noggin in many Mr Fluffy houses and still presented a source of contamination even after roof spaces were cleaned and sealed.

A recommendation to remove the internal walls of homes was presented to the Follett government in order to make houses safer, but was rejected on a number of grounds – cost foremost among them.

"Some asbestos was found in the internal wall cavities which had entered through two-centimetre gaps that occurred where wall linings failed to meet top wall plates or where electrical wire passed through wall linings," Mr Wheeler said in his report.

"The review drew attention to the contamination of internal walls and recommended that the cleaning of internal wall cavities be included in the program.

"The government considered the recommendation to return to the 380 houses cleaned to that stage and attempt to clean internal wall cavities. It was always known that some asbestos might penetrate the internal walls down to the first noggin and that care would be needed in any renovation.

"Apart from the cost (which was judged to be very significant) the minister was advised of a number of concerns including that efforts to access the internal walls could affect the structural integrity of the house and require householders to again vacate their houses.

"It was decided not to act on the recommendation regarding the internal walls either for houses already cleaned or those still waiting to be cleaned. Householders were to be alerted to the need for caution in the case of renovations that breached internal walls."

An Environment Australia Technical Paper prepared by the CSIRO in 1997 further noted remnant asbestos was a problem in the ACT.

"No action was taken on residues in internal walls," it said

The Commonwealth funded 66 per cent of the clean-up which was administered by the ACT government over five years until 1993.

Following Mr Wheeler's report, the ACT government wrote to Mr Fluffy homeowners, urging caution if they planned to undertake renovations or extensions.