New York City will pay up to 657.5 million US dollars (£437 million) in compensation to rescue and recovery workers affected by dust at Ground Zero after the 9/11 attacks.

The settlement was announced Thursday evening by the World Trade Centre Captive Insurance Company, a special entity established to indemnify the city and its contractors against potential legal action as they moved to clean up the site after the September 11, 2001, terror attacks.

The deal, which still must be approved by a judge and the workers themselves, would make the city and other companies represented by the insurer liable for a minimum of 575 million US dollars (£382 million), with more money available to the sick if certain conditions are met.

Most if not all of the money would come out of a one billion US dollar (£664 million) grant from the Federal Emergency Management Agency.

Mayor Michael Bloomberg called the settlement "a fair and reasonable resolution to a complex set of circumstances".

"The resolution of the World Trade Centre litigation will allow the first responders and workers to be compensated for injuries suffered following their work at Ground Zero," he said.

Marc Bern, a senior partner with the law firm Worby, Groner, Edelman & Napoli, Bern LLP, which negotiated the deal, said it was "a good settlement".

"We are gratified that these heroic men and women who performed their duties without consideration of the health implications will finally receive just compensation for their pain and suffering, lost wages, medical and other expenses, as the US Congress intended when it appropriated this money," he said.

Workers who wish to participate in the settlement would need to prove they had been at the World Trade Centre site or other facilities that handled debris. They also would have to turn over medical records and provide other information aimed at weeding out fraudulent or dubious claims.

For the settlement to be enforced, 95% of the workers would need to agree to be bound by its terms.