A U.S. Senate panel yesterday approved creating a $140 billion fund for asbestos-exposure victims that would end litigation that has bankrupted 77 companies.

The Senate Judiciary Committee’s 13-5 vote in Washington, over the objections of labor unions and insurers, sets the stage for a debate by the full Senate possibly as early as next month.

The bill would pay victims up to $1.1 million for deadly cancers. The trust would be financed by makers of asbestos products, such as vinyl-flooring maker Armstrong Holdings, and USG, the world’s largest wallboard manufacturer, and their insurers, such as CNA Financial. Congress has sought to find a way to compensate asbestos victims for two decades.

The bill “will enable thousands of victims of asbestos[-related] diseases who have been able to collect nothing to collect now from this fund,” said panel Chairman Arlen Specter, a Pennsylvania Republican.

He said Senate Republican Leader William Frist will “give priority treatment” to the bill and that it has White House support. Even so, Mr. Specter said the bill faces lengthy debate on the floor and that “we don’t underestimate the difficulty of getting the bill through.” Senator Leahy of Vermont, the panel’s ranking Democrat, said a number of Democrats are prepared to support the bill.

“This is a far, far better bill and has a far better chance of getting somewhere” than a bill passed by the panel and blocked on the Senate floor two years ago, Mr. Leahy said. Shares of Chicago-based USG fell $1.51, or 3.1%, to close at $46.84 in New York Stock Exchange composite trading. Shares of CNA, based in Chicago, rose 14 cents to $27.34, and shares of insurer Chubb, based in Warren, N.J., rose $1.20, or 1.5%, to $83.97. “The asbestos stocks are down because everyone knew this was going to happen so you fell on the news,” said Jaret Seiberg, an analyst with Stanford Financial Group’s Stanford Washington Research Group.