Hazel Blears, secretary of state for communities and local government, has given the company the green light for its controversial plans.

It follows a two-week public inquiry after Able UK appealed against Hartlepool Borough Council's rejection of plans to dismantle the former US navy vessels.

The ships are docked at Able UK's Graythorp yard, near Seaton Carew.

Ms Blears has backed planning inspector Ken Smith's findings that permission should be granted, saying it was national policy to develop a safe approach to the recycling of end-of-life vessels.

Work is already under way to develop Able UK's Teesside Environmental Reclamation and Recycling Centre (TERRC).

Peter Stephenson, Able UK chief executive, said: "Obviously I am pleased that our actions and the validity of our plans have been so clearly supported by the planning inspector and accepted by the minister."

Hartlepool Council now faces a hefty bill to cover the costs of the hearing.

Estimates have put the cost anything up to £1 million.

The council has been ordered to pay for the full two-week hearing except the last day.

The parties will now meet to discuss a figure.

A council spokesman said: "We are disappointed that the council is requested to meet a portion of Able UK's costs and we will now need to discuss this further with Able UK representatives.

"As we have stated before, the council has followed the democratic process from the outset regarding Able UK's planning applications and acted in accordance with the necessary planning guidance and regulations."

Evelyn Leck, of Hartlepool and North Tees Friends of the Earth, said: "I think the decision is disgusting. They are not taking into account the health of the people of Hartlepool."