The government will buy 155 million doses of the smallpox vaccine, preparing for the possibility that terrorists may try to spread the highly contagious disease.

The Department of Health and Human Services signed a $428 million contract with British-based Acambis Inc. Wednesday.

The purchase will bring the nation's stockpile to 286 million doses by the end of next year — enough to protect every American.

But there are no plans to resume the routine vaccinations of Americans that ended in 1972, HHS Secretary Tommy Thompson said. That's because the vaccine can be administered four days after exposure to smallpox and still offer protection and because it can cause some rare but deadly side effects.

Still, Thompson predicted that the contract would prompt demand for the shots by many Americans.

"That discussion is not only going to be taking place here in the department, but in Congress, at the White House and across America," he said.

Smallpox hasn't occurred in the United States since 1949 and was declared eradicated worldwide in 1980. But the Centers for Disease Control and Prevention in Atlanta and a Moscow laboratory hold stocks of the virus, and bioterrorism experts worry that samples could fall into terrorists' hands and be used as a weapon.

Experts believe such a smallpox attack is unlikely, but it could overwhelm communities were it to occur. The virus is highly contagious, and nearly a third of its victims die.

"The risk does exist and we must be prepared," Thompson said.

"Obtaining the vaccine represents an important insurance policy," added Dr. D.A. Henderson, who led the global campaign that eliminated smallpox and is now Thompson's top bioterrorism adviser. "It's simply a prudent thing to do at this point in time."

But the risk of a smallpox attack is not significant enough to justify the risks associated with the vaccine, he said.

About three in every 1 million people vaccinated would get encephalitis, which can cause permanent brain damage or death. Another 250 among the total population vaccinated would get a smallpox-like rash that also can be fatal if not properly treated. And experts estimate that if every American were vaccinated against smallpox, about 400 people would die from the vaccine.

"It causes more complications than any vaccine we now have," Henderson said.

Should smallpox reappear, a federal response plan calls for isolating the patient and then vaccinating those in close contact with him or her.

The government already has 15.4 million doses of smallpox vaccine on hand, and officials are prepared to dilute each one to create five doses, bringing the total to 77 million. Researchers are studying whether each dose could be further diluted, to get 10 doses from each one.

In either case, the diluted vaccine would be used only if the new doses had not yet been delivered, or if they ran out, said Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Disease.

An additional 54 million doses already have been ordered from Acambis and are expected to be delivered next year.

The new contract will bring another 155 million doses, which are expected by late fall 2002. They will cost the government $428 million, or $2.76 per dose. That's less than the $509 million that the Bush administration has asked from Congress to pay for the new vaccine.

The initial budget request assumed that the government would need to buy 250 million doses, but new research has found that the existing vaccine can safely be diluted, meaning much less new vaccine is needed.

To make the newest batch of vaccine, Acambis has teamed with Baxter International, which will begin brewing doses immediately at an undisclosed European factory, Acambis spokeswoman Lyndsay Wright said. Acambis' own manufacturing will begin soon at a factory in Cambridge, Mass., she said.

After the vaccine is manufactured, it must be tested in clinical trials and then approved by the Food and Drug Administration. The FDA promised an expedited review but vowed not to lower its standards.

The Associated Press contributed to this report.