With an aim of designing a biodegradable packaging material with considerable stability, herein, layered double hydroxides (LDH) bundled agar grafted polyacrylonitrile nanocomposites (Agar-g-PAN/Ag/LDH) incorporated with silver nanoparticles (Ag Nps) have been synthesized using surfactant free in situ polymerization method. The LDH platelets form a laminating structure around the Agar-g-PAN copolymeric network while the Ag Nps are dispersed throughout the material. The prepared nanocomposite films exhibit high thermal stability because of the sandwiching of polymeric chains in between the LDH platelets which also evidences the improvement in fire retardancy. The comparative analysis of limiting oxygen indices of Agar-g-PAN/Ag/LDH nanocomposites with PAN and Agar-g-PAN clearly indicates the fire-repellent nature of the materials. Proper exfoliation and partial intercalation of the LDH platelets as well as presence of Ag Nps result in almost five-fold enhancement in oxygen barrier properties of Agar-g-PAN/Ag/LDH nanocomposite films as compared to the copolymeric matrix. The combination of LDH with Ag Nps shows a synergistic effect in improving the biodegradability and chemical resistance of the nanocomposite films. The antibacterial studies indicate remarkable antibacterial properties of the Agar-g-PAN/Ag/LDH nanocomposites which are more pronounced for gram negative bacterial strains. The synthesized nanocomposite films are biodegradable and chemically inert with enhancement in thermal, barrier and antibacterial properties, making them suitable candidates for packaging applications.