The federal government says it will spend up to $2 billion to compensate former residential school students.

“It is an agreement for the ages,” said Phil Fontaine, National Chief of the Assembly of First Nations.

Fontaine was one of the first to go public years ago with his own story of sexual and physical abuse at the Fort Alexander School in Manitoba.

“No amount will ever heal the scars,” Fontaine said, adding that he will pursue an official apology from Prime Minister Paul Martin – something that was not included in talks leading up to the deal.

The agreement, which must be approved by the courts, is open to more than 80,000 former students who can apply to receive $ 10,000 plus $3,000 for each year spent in residential school.

Also announced was a plan that candidates over age 65 can apply for a fast-track advance payment of $8,000.

Successful applicants should be able to receive payments within a year – possibly as early as six months – depending on how quickly the proposal is assessed in court.

The deal says those who take the compensation payments would release the government and the churches who ran the schools from further legal liability, except in cases of sexual assault or serious physical abuse.

In those cases, an improved out-of-court settlement process to be overseen by adjudicators “will become the exclusive vehicle by which that student could pursue a further claim,” says the agreement.