BUENA VISTA, Va. (AP) _ A judge on Monday approved a $2 million settlement for one of the families who was given the wrong baby in a hospital nursery, but the girl's biological mother is fighting the agreement and will seek custody of the child.

Part of the agreement provides money for the grandparents who share custody of Rebecca Chittum. Her biological mother, Paula Johnson, who has custody of the girl Rebecca was switched with, believes the grandparents have no right to compensation and plans to appeal, her attorney said.

``There's no reason to divert any of this money away from this child to the grandparents,'' Ms. Johnson's attorney, John Blakely, told Circuit Judge Thomas Wood.

The money would come from the state, which runs the University of Virginia Medical Center, where Rebecca and Callie Conley were switched in 1995.

Ms. Johnson took Callie home from the hospital, believing the infant was her child, and has been raising her.

Rebecca went home with Kevin Chittum and Whitney Rogers, Callie's biological parents. The couple died in a car crash last July 4, around the time the switch was discovered. Rebecca is being raised by the parents of Chittum and Ms. Rogers.

The cause of the switch was never determined.

In an interview Monday night with The Daily Progress of Charlottesville, Blakley said Ms. Johnson will sue for custody of Rebecca.

``If your child were in the care of someone else,'' Blakely said earlier, ``and you saw some of the money that you think should be going to your child going to people to whom it doesn't belong, you'd be upset and wonder whether or not something should be done about the placement of that child.''

No settlement agreement has been reached for Callie, and Ms. Johnson's attorneys said they plan to sue the hospital.

The dispute over how much money the two children and their families deserve for the mix-up has ruined an informal custody and visitation agreement among the families. Visitations have ended, and feelings have soured to the point that Ms. Johnson refused to accept an Easter basket that one of Rebecca's grandparents wanted to give to Callie, their biological granddaughter.

``It kind of shocked me,'' said the grandmother, Brenda Rogers.

Ms. Johnson's mother, Jewel Condrey, accepted the basket after Monday's hearing, and gave Ms. Rogers a basket she made for Rebecca.

The settlement for Rebecca includes $400,000 in a long-term annuity that will grow to $1.5 million over 25 years; $200,000 in a trust fund for Rebecca and accessible by her grandparents; $125,000 paid directly to Rebecca's grandparents, and $150,000 in lawyers' fees.

Blakely told the judge that the settlement was insufficient and that at least $1 million should go solely to the child.