A US court will decide this week if controversial plans to dispose of condemned US warships in a North-East yard can go ahead.

Officials in the US have agreed to put plans to export ageing US Navy ships on hold until the dispute is resolved on Wednesday.

The £11m deal has prompted a storm of protest among environmentalists on both sides of the Atlantic.

They said the ships, which are moored in the James River, Virginia, are nothing more than a toxic armada.

Officials said the rusting hulks contained lead, mercury and cancer causing poly-chlorinated biphenyls, but said everything was in place to dismantle them safely at a facility in Hartlepool.

Able UK, the British company that has won the dismantling contract, was pressing ahead with plans to tow the ships across the Atlantic.

If it does not remove all 13 vessels by November 30, the US Government will impose fines of $1,350 per vessel per day on the firm.

It had been thought the vessels were ready to sail, but the plan has hit a last-minute legal hitch.

Lawyers representing two US environmental groups - the Basel Action Network (Ban) and Sierra Club -yesterday filed a lawsuit in the US Federal Court to stop the first two vessels leaving.

The case will be heard on Wednesday and the US Marine Administration (Marad) confirmed last night that the ships will not be exported before the hearing.

The decision was welcomed by campaigners in the UK.

Friends of the Earth legal advisor Phil Michaels said: "We hope that Ban and the Sierra Club are successful with this legal challenge to stop the US Ghost Fleet coming to Teesside.

"This toxic shipment is both dangerous and unnecessary. We will continue our campaign for these boats to be disposed of in the United States."

A spokesman for Able UK was unavailable for comment last night.