AN investigation has been launched into the way contracts were awarded for the dismantling of the "ghost fleet" being towed to the region for dismantling.

The US General Accounting Office (GAO) has agreed to carry out the probe following complaints from companies that failed to win the work.

Republican congressman Solomon P Ortiz called for the review after Able UK - based on Teesside - was awarded the contract by the US Maritime Administration (Marad) to dispose of 13 of the 97 former navy vessels.

Mr Ortiz, whose district in Texas includes several scrapping companies, wrote to the GAO's controller general, David Walker, questioning the fairness of the bidding process.

"Recent events indicate Marad's programme is not being implemented in a method to gain the best value for the US taxpayer or reduce the environmental threat," the letter said.

Able's £11m tender is said to be higher than some bids made by US companies, but Marad said the deal provided best value for taxpayers.

Environmental campaign group Basel Action Network claims to have obtained documents that show a tender from Texas company International Shipbreaking was almost £1.2m lower than Able's.

Four of the 13 ships have already left their moorings on the James River, Virginia, and the first two are expected at the Able yard, at Hartlepool, on November 5. The remaining nine will not leave the US on the 4,500-mile voyage until April at the earliest.

Campaigners say the ships, which contain asbestos, heavy diesel and PCB chemicals, are a threat to the environment. But Able said the 24-acre Graythorp yard is one of the best-equipped in the world to deal with the work.