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 a £11m deal to recycle the 13 strong so-called 'ghost fleet' going ahead.

It said that the ship building work -- the first at the Graythorp facility for a number of years -- would mean 'valuable business' for local companies and a boost for jobs.

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 get their way.

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 which have already been towed across the Atlantic from their home in 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 then 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 currently moored in Hartlepool, nine others are likely to remain in the US until next Spring, pending legal challenges there.

*Able has set up a website which gives information about the deal to scrap the ships which is at www.ableshiprecycling.com.