When carbon dioxide (CO2) is passed through lime water (a solution of calcium hydroxide - Ca(OH)2), a reaction occurs. This reaction can be represented as follows:

CO2 + Ca(OH)2 -> CaCO3 + H2O

In this reaction, the carbon dioxide reacts with calcium hydroxide to form calcium carbonate (CaCO3) and water (H2O). This calcium carbonate is initially formed as a precipitate, which makes the solution turn milky.

However, on prolonged passage of carbon dioxide, the milky solution turns clear again. This is because the reaction is reversible. More specifically, the carbon dioxide further reacts with the calcium carbonate:

CaCO3 + CO2 + H2O -> Ca(HCO3)2

In this reaction, the calcium carbonate reacts with more carbon dioxide and water to form calcium bicarbonate (Ca(HCO3)2). Calcium bicarbonate is soluble in water, which explains why the solution turns clear again.

Therefore, option 1 is correct. The calcium carbonate formed initially is converted to soluble calcium bicarbonate on the passage of more carbon dioxide.