The Chesapeake Bay Foundation is serving notice: Clean up your act, or it will sue.

Fed up with what it says are lackluster results in curbing pollution, the foundation announced this month that it is starting an aggressive litigation program designed to hold polluters -- and the government agencies that oversee them -- accountable.

The foundation said it plans to continue its earlier efforts to protect the bay from harmful pollutants. But now, armed with a $1.25 million grant, it will be more willing to take matters to court, officials said.

"We will continue efforts to educate and build broad public support for legislative and regulatory change," William C. Baker, the foundation's president, said in a statement. "But in the final analysis, when government is unwilling or unable to enforce the law, the only recourse remaining is legal action."

A report issued by the Chesapeake Bay Program in May said almost one-third of the bay's underwater grasses, which serve as breeding places and wildlife habitats, died last year. It was the largest single-year reduction in the grasses in years.

In its "State of the Bay" report last year, the foundation said the "bay's health has languished at about one-quarter of its potential for the last six years."

"We have asserted that bay restoration is stalled, particularly improvements in water quality," the report said.

The bay, which has 16 million people living in its 64,000-square-mile watershed, is "a system dangerously out of balance," the report said.

The increasing declines in the bay's health are prompting the foundation to become more aggressive, officials said.

"The Bay Foundation, among others, has over the last two or three years become increasingly frustrated with the lack of action at the state and federal level to squarely deal with the bay's pollution problem," said Chuck Epes, a foundation spokesman.

The litigation project is "a sort of last resort," he said. "It's good to have that tool in the bag and to have the financial resources to use it."

Roy Hoagland, the foundation's Virginia executive director and a senior attorney, said the foundation will pick its legal fights selectively, looking for major polluters. The foundation will also go after governments and agencies -- local, state and even federal -- that it feels are not doing enough to protect the environment. By doing that, he said, the foundation could bring about widespread policy change enforceable by court action.

The foundation has a possible defendant in its sights: the U.S. Environmental Protection Agency. The foundation has challenged the federal government's enforcement of the Clean Water Act, saying the agency has failed to require enforceable limits that adequately reduce pollution.

"Should the EPA fail to take this action and reduce pollution, litigation may be the only tool left to us," Baker said.

The foundation has taken matters to court before. It is suing Virginia, alleging the state issued a permit in violation of its wetlands protection law that would allow a housing development in the city of Chesapeake to destroy 145 acres of vulnerable wetlands.

Last week, the foundation informed Virginia to expect lawsuits over permits issued to Philip Morris USA and the town of Onancock. The foundation alleges the permits allow too many pollutants into contaminated rivers.

"While years of sound science have provided a road map to restoring the bay, the politics of postponement have produced few significant improvements in water quality," Baker said.

In the project, the foundation will use staff attorneys and work with law school clinics and public interest law firms, officials said. The grant comes from the Lenfest Foundation, a philanthropic organization based in the Philadelphia area that supports nonprofit groups.