THOUSANDS more rusting ships will need to be scrapped during the next few years - and the North-East could be at the forefront of the dismantling effort.

But hopes that the Able UK dismantling yard could be poised to win more work hit immediate problems last night when the EU voted to ban the ships.

The revelations came during a debate on the arrival of rusting warships from the US for dismantling on Teesside.

Able UK has clinched an £11m contract to scrap 13 unwanted US Navy ships at its facility in Hartlepool. Environmentalists claim the vessels are a pollution risk.

Government ministers want the European Union to ban single-hull vessels, which are more likely to cause an ecological disaster by spilling thousands of tonnes of pollutants into the sea if holed.

Most single-hull ships were built before the 1970s and contain potentially-harmful substances including asbestos and oil.

If Teesside earns a worldwide reputation for decommissioning rusting vessels, it stands to win many more contracts.

Hartlepool MP Peter Mandelson said Teesside could turn the "public relations disaster" over the ships into "a major employment opportunity" by tapping into increasing international demand for breakers' yards.

Giving evidence to the Commons' Environment Committee, Environment Minister Elliott Morley said there were more than 2,000 single-hull tankers sailing under the flags of EU nations.

He said: "If there is a phasing out of these tankers on environmental grounds, there is going to be an increased demand for yards to dismantle them safely and professionally."

He said it was preferable for UK firms to win future contracts.

Work on the ships moored at Able UK has been put on hold after a legal challenge by Friends of the Earth.

The environmental group claims that the toxic chemicals and asbestos make the ships a hazard.

Sir John Harman, chairman of the Environment Agency, told the committee that its view was that a properly authorised dismantling of the vessels was preferable to repatriation.

As the committee was taking evidence, Euro-MPs in Strasbourg approved plans to outlaw the importation of toxic waste containing PCBs (polychlorinated biphenyls) by 2005.

The import ban, if approved by EU governments, would apply to waste contaminated by PCBs intended for disposal or recycling, including toxic materials on ships destined for the breaker's yard.

Friends of the Earth said: "The law vindicates the position we have taken that these ships are toxic and should not be imported into the UK."

The only exception to the rules would be contaminated waste coming from a country that lacks the technical facilities to dispose of the waste safely.