We present a density functional theory investigation of the decomposition of Mg(OH)(2). Based on recent experiments indicating a lamellar dehydroxylation process we have calculated the energetics, elastic behavior and structural trends of a series of oxyhydroxide intermediates of composition Mgx+yOx(OH)(2y) representing a solid solution series between brucite (Mg(OH)(2)) and periclase (MgO). Using a variationally induced breathing (VIB) ionic approach we find that this broad range of lamellar oxyhydroxide intermediate materials becomes thermodynamically accessible at temperatures near 500 degreesC. The computed dehydroxylation dependence of the compressibility is found to vary dramatically with the initial formation of periclase-like oxide layers displaying an abrupt jump to a value near that of periclase (similar to160 GPa). In contrast to this very non-linear behavior the basal plane lattice parameter a is found to exhibit a nearly linear (Vegard-like) dependence on hydroxyl content. (C) 2002 Elsevier Science B.V. All rights reserved.