This paper discusses the geotechnical engineering design aspects related to reactive basaltic clays in Victoria. The issues associated with earthworks, such as the effect of placement moisture content, strength of the clays and testing of the earthworks are also discussed. Possible measures to reduce the future shrink and swell movements, including lime stabilisation are discussed. The required amount of lime, the effect of addition of lime on plasticity, California Bearing Ratio and permeability are presented and discussed. Durability of lime stabilisation is also briefly discussed. Although the results and discussions presented are specific for basaltic clays in Victoria, the issues and concepts discussed are applicable for reactive clays in general.