The Agency has started a public consultation on a waste management licence that would allow Able UK to scrap ships at its Graythorp site in Hartlepool and dispose of or recycle their materials.

Four US ships have been rusting in the company's dock on the Tees since late 2003 as the company sought permission to begin work and fought off challenges from protestors.

Hartlepool Borough Council eventually granted planning permission in October last year, but Able UK still requires the waste management licence.

Bob Pailor, environment manager for the Agency in the North East, said the permit was one of the last significant hurdles for the company before it can begin dismantling the ships.

He said the draft licence takes into account the strong public views held on the issue. "We have drafted a licence which we think protects the public and the environment," he said.

He explained that the Tees estuary, where the dock is situated, is an extremely valuable feeding place for migrating birds and has special EU protection.

Protesters fear the plans would cause major health and environmental problems in the area and also destroy this coastal wildlife haven.

The consultation will run until May 11 and the Agency will make its decision at the beginning of June.

No one from Able UK was available for comment; however the company has previously said the recycling plant would bring major economic benefits to the town and that the proposed facilities at the site would fill a national and international gap in the ship-recycling market.