At a private meeting last Tuesday, councillors resolved to allocate $5million for immediate remediation works at and around the former Stevensons Road tip in Cranbourne.

This takes the total council cash injection so far to $10million, as Casey had already spent $5million on remediation efforts since methane was first detected leaking from the former landfill and into a nearby residential area about 18 months ago.

The Journal understands estimates for the total cost of fixing the mess - ranging from remediation works to possible acquisition of some homes - jumped last week from about $120 million to up to $150-$200 million.

It remains unclear how much the State Government may chip in. The EPA issued the council with a clean-up notice on September 18, carrying fines of about $272,000 for breaches.

In a sign the EPA is keeping a close watch over the council's management of the long-running tip row, the notice contains a strict deadline for short-term management requirements, including more gas wells.

The EPA is also insisting Casey provides a written long-term managment assessment by the end of the month containing options for preventing gas migrating beyond the landfill site.

The assessment must include "a preferred option prepared by an appropriately qualified professional ... and detail any milestones that can be used to track the progress of the implementation of the preferred option.''

In a question-and-answer session at a public forum run by the council last Thursday, planning and development services director Peter Fitchett said Casey had first discussed the issue with its insurers about "12-18 months ago''.

The Journal understands the discussion took place in January 2007, indicating the council was already concerned about possible compensation claims months before the issue hit the headlines.