While denying negligence by one of its premier bio-weapons labs, the government has agreed to pay $2.5 million to settle a wrongful death suit filed by survivors of the first fatality victim of the deadly 2001 anthrax mail attacks, court papers revealed Tuesday.

The money will go to the widow and children of Robert Stevens, a Florida-based photo editor for the National Enquirer and other tabloids who was the first of five people to die after inhaling the tiny spores.

The settlement ended a secrecy-shrouded, eight-year court fight shortly before U.S. District Judge Daniel Hurley of West Palm Beach, Fla., was due to either grant a Justice Department motion to dismiss the suit or to send the case forward to trial. By settling, the government protected from public scrutiny a sizable cache of documents about its secretive biological weapons program.

At issue was whether a leading U.S. Army bio-weapons laboratory in Frederick, Md., was negligent in failing to adequately secure its anthrax stocks, possibly enabling a mentally troubled researcher at the lab to carry out the attacks.

Bruce Ivins,  READ FULL POST 6 COMMENTS

In March 2007, federal agents convened an elite group of outside experts to evaluate the science that had traced the anthrax in the letters to a single flask at an Army lab in Maryland.

Laboratory work had built the heart of the case prosecutors had against Bruce Ivins, an Army researcher who controlled the flask. Investigators had invented a new form of genetic fingerprinting for the case, testing anthrax collected from U.S. and foreign labs for mutations detected in the attack powder.

Out of more than 1,000 samples, only eight had tested positive for four mutations found in the deadly germs sent to Congress and the news media.

Even so, the outside scientists, known as the Red Team, urged the FBI to do more basic research into how and when the mutations arose to make sure the tests were “sound” and the results unchallengeable.

Jenifer Smith, a senior manager at the FBI’s laboratory, shared the team’s concerns. Smith recalled that she was worried the FBI didn’t have a full understanding of the mutations and might see a trial judge throw out the key evidence.

“The admissibility hearing would have been very difficult,” Smith recalled in an interview. “They had some good science but they also had some holes that would have been very difficult to fill.”