The Virginia Supreme Court refused yesterday to block a $2 million settlement between the University of Virginia hospital and Rebecca Grace Chittum, one of two little girls who were switched at birth during the summer of 1995.

Paula Johnson, Rebecca's biological mother, had argued that $2 million was not enough compensation for the mistake. Rebecca is being raised by the other girl's grandparents, who reached the settlement with the State of Virginia in February.

Barring an appeal to the U.S. Supreme Court, attorneys for the state said they would begin paying the structured settlement to Rebecca and her guardians immediately.

"This confirms . . . that the amount of the settlement is fair, and is in the best interests of this child," said the hospital's attorneys, Steuart Thomas and Gregory Lucyk, in a statement. "The agreement will provide for Rebecca's needs now and well into the future."

Johnson's attorneys did not return calls yesterday. Attorneys for the grandparents raising Rebecca did not return calls either.

The settlement calls for Rebecca to receive about $1.8 million over the next 27 years, starting when she turns 18.

The grandparents raising her would receive $125,000, and their attorneys would receive $75,000.

"We look forward to working with the Rogers and Chittum families, and their attorneys, to arrange for prompt distribution of the funds," the statement from the hospital attorneys said.

Johnson had argued that the settlement did not punish the hospital severely enough because state officials proposed to purchase a $401,000 annuity to generate money for the payments. Johnson rejected the same settlement terms on behalf of the child she is raising, Callie Marie Johnson.

Johnson's attorneys also argued that the settlement should not be finalized until legal issues surrounding custody of the children are decided. Both sides filed for full custody of the girls after relations between Johnson and the grandparents broke down.

Yesterday's decision by the state Supreme Court came in the form of a one-paragraph order refusing to hear Johnson's appeal.

The order does not affect the status of other legal proceedings in the baby-switching case, including the $31 million lawsuit Johnson has filed against the university and the doctors and nurses who worked there when she gave birth.

Johnson also has filed suit against the manufacturer of identification bracelets used at the time to match babies with their mothers.

CAPTION: Paula Johnson, left, sought to block Virginia's plan for a $2 million settlement with her biological daughter, Rebecca Grace Chittum.