THE company which wants to scrap a toxic fleet of rusting US Navy ships in the North-East has warned it may lose out on more lucrative work should the deal collapse.

Able revealed that construction work to bring two part-completed oil tankers back into service could be carried out at its Hartlepool dockyard.

But this was dependent on an £11m deal to recycle the 13- strong so-called 'ghost fleet' going ahead.

The company said the shipbuilding work, the first at the Graythorp facility for a number of years, would mean valuable business for local companies and create a jobs boost.

Able has already claimed that 200 jobs will be created should the 13 redundant ships, forming part of the US Defence Reserve Fleet, be scrapped and warned that it will lose a £3.4m bond if opponents of the deal block it.

The High Court is due to hear two separate legal challenges later this month, which will decide the immediate future of four ships now moored in Hartlepool.

They have been towed across the Atlantic from the James River, Virginia.

The two part-completed oil tankers, the Benjamin Isherwood and the Henry Eckford, were ordered by the US Navy but work on them was never completed.

They were acquired as part of the overall contract to remove 15 vessels from the fleet moored in the James River.

Able managing director Peter Stephenson said it intended to complete work on the two tankers and bring them back into service.

He said: "Provided we can resolve the issues surrounding the recycling of the other vessels, there is a very strong case for the completion work to be carried out by local workers.

"If this did happen, we would hope it opens up the possibility of attracting further similar construction contracts in the future."

As well as the four ships moored in Hartlepool, nine others are likely to remain in the US until spring next year, pending legal challenges there.

* Able has set up a website which gives information about the deal, on www.ableshiprecycling.com

* The Northern Echo's on-line archive of stories on the issue is available by logging on to www.ghostships.co.uk