A NORTH-EAST company believes its controversial plan to scrap unwanted US warships will still go ahead, despite a new plan to scuttle redundant vessels instead.

Hartlepool-based Able UK has a contract to dispose of 13 vessels from the rusting US Reserve Fleet.

The ships have been at the centre of an international legal wrangle over whether the disposal should go ahead.

Four vessels have been at Able UK's moorings on the Tees estuary for almost a year pending negotiations.

The other nine are moored on the James River, in Virginia, awaiting the outcome of a legal challenge brought by environmental group the Basel Action Network (Ban).

Able UK says it is confident the US courts will grant permission for the scrapping operation to go ahead.

In August, managing director Peter Stephenson said he hoped the company could bring more ships across for disposal.

Able UK has an option to bring over about half of the US's 165 redundant ships and hopes to become Europe's leading scrapyard for such vessels.

But in a new twist, the US government has hit upon a different disposal plan to sink the ships in US waters.

The Environmental Protection Agency and the US Maritime Administration have given the plan their blessing. Officials have until 2006 to get rid of the worst examples of the fleet. It isn't known how many ships may be sunk.

Redundant warships have been scuttled before - the Royal Navy sank one of its old destroyers off the coast of Britain last year - where they become artificial reefs.

But Ban is opposing the plan, claiming it is just an attempt to legitimise the dumping of mothballed wrecks instead of promoting domestic ship recycling programmes.

Jim Puckett, co-ordinator of Ban, said: "EPA's plan to allow the dumping is a shocking and singularly bad idea."

Mr Stephenson said: "This will not affect our existing contract and I don't think they are talking about scuttling more than one or two ships out of more than 100.

"I don't know what environmental impact there will be from deep sea scuttling, but our re-cycling is more environmentally friendly, getting raw metal re-introduced into the chain."

Not only is Able confident of winning the court hearing when it finally goes ahead on October 15, but Mr Stephenson is hoping more redundant US ships will follow.

A report by the Rand Corporation in 2001 estimated that the total cost to the US government for disposal of these vessels would be $1.87bn dollars via domestic recycling, $170m to export them to Asia, and $500m to dump them as artificial reefs.

No one from Able UK was available to comment last night.

Read more about the Ghost Ships campaign here.