A NORTH-East company faces prosecution after a stream became contaminated with detergent.

The Environment Agency last night confirmed it is deciding whether to take legal action against an unnamed company after chemical substances in the water caused Territorial Army cadets to be physically sick.

The cadets were on an exercise in Mill Wood, near Chilton, County Durham, when they noticed the smell.

The incident was reported to the Environment Agency, which discovered about 1km of the beck was contaminated with detergent and kerosene.

An agency spokesman confirmed that it was considering prosecution.

He said: "Our inquiries uncovered an alleged source of the pollutant and we have taken statements as part of this investigation process.

"The agency's legal team will dictate what course of action will be taken as a result of this incident."

He added that the smell of the kerosene could have caused people to be sick, but it was not otherwise harmful to humans