UP to 80 more US navy "ghost ships" could be heading to the North-East for dismantling, the firm at the centre of the row told a committee of MPs yesterday.

And Able UK predicted it would soon be scrapping British warships, as the Government accepted it could no longer risk environmental damage by sending them to developing countries.

Giving evidence to the all-party environment committee, chief executive Peter Stephenson revealed Able UK had "an option" to bring over about half of America's 165 redundant ships.

A deal for 80 ships would dwarf the agreement covering the four awaiting dismantling at the company's Graythorp site in Hartlepool, or the nine ships due to make the journey.

In addition, the British government -- under fire for sending its defunct warships to India or China - has entered into talks for two to be scrapped at Graythorp.

Mr Stephenson told the MPs the publicity surrounding the ships, dubbed "toxic timebombs" by campaigners, had "shown how strong public opinion can be".

As a result, large companies, such as BP, did not want to be condemned by environmental groups and would no longer accept the "cheapest price" in the Third World.

Mr Stephenson said: "We are in discussion to bring over half of the (US) ships. That's still an option open to us. No one can compete with our facility on environmental grounds."

He added: "We and the US government are trying to do it properly. The US government should be applauded for spending money for trying to do it correctly."

Mr Stephenson said the American deal would pump £35m a year into the Teesside economy and create 1,000 permanent jobs. Ship recycling could be worth £3.5bn by 2010.

But he conceded the court action that was still preventing Able UK from dismantling the first four ghost ships had "hurt us very badly".

Read more about the Ghost Ships campaign here.