Able UK could soon land a "phenomenal" deal to dismantle 13 US former naval ships from a massive obsolete fleet moored in the US, known as the Ghost Fleet.

The US Maritime Administration said the contract with the Billingham-based firm, their preferred option, could be signed by the end of the week.

And if successful it could mean an indefinite supply of work from the ever-growing pool of obsolete ships moored in US waters.

The 13 ships would be towed across the Atlantic and round the north coast of Scotland to be dismantled at Able UK's yard in Graythorpe, Hartlepool.

Although no figure has been confirmed, the US Government is known in the past to have paid more than £1m per ship to be scrapped.

Able UK Managing Director Peter Stephenson said today: "If we are successful, it's something to be proud about.

"To our knowledge it will be the largest recycling contract ever signed.

"It's all to do with the quality of the labour in the area and the expertise.

"That's the expertise of Teesside and that's what we're trying to promote.

"And it shows the expertise of the governing authorities in the area in the first place to get our facilities approved.

"It's a phenomenal opportunity for the area and it will mean 200 new permanent jobs.

"We haven't got the contract yet - we are in negotiations. We expect it, but we haven't got it yet."

The deal has sparked controversy in Scotland, with concerns over the safety of the ageing ships which are said to contain oil and chemicals.

But the UK Maritime and Coastguard Agency said today no dangerous ships would be allowed into British waters.

A spokesman said: "We would ensure that a complete risk assessment is done, with all the certification to the highest international standards before any tow was allowed within British waters."

And Mr Stephenson said the firm has been doing this type of work for ten years and can dispose of any dangerous substances safely.

He said clearance had already been received from the Environmental Protection Agency as well as the US authorities, who have inspected the site.

Robyn Boerstling, spokeswoman for the US Maritime Administration, said: "Everything has pretty much been negotiated but there's some details that need to be worked out.

"We have an immediate need to get rid of a large number of ships all at once and this facility has that capability.

"These are relatively old ships, but most of the hulls are in good condition.

"They have undergone a tow safety survey to ensure that they could make the tow across to the facility on Teesside," she said.