Informed sources close to the ship breakers, Haryana Ship Demolition, say the breakers are prepared to start beaching the 1,000 foot ship within the next 48 hours at Alang, India, the world's largest ship breaking yard. “They’re prepared to start on Monday,” the source said, referring to Haryana.

And, a second report by environmental campaigners yesterday accused the liner's former owners, Star Cruises Ltd, of ‘deceiving’ German authorities when the ship was moved from the German port of Bremerhaven to Malaysia in 2005. The report alleges Star Lines concealed the fact the ship was intended for the scrap heap. Star apparently told the German authorities the ship was going to Asia for ‘repairs’.

The report’s allegations mirror those exposed two days ago in Khaleej Times, when it was revealed Malaysian maritime authorities also appeared to have been mislead when the liner was moved from Asia to India in May 2006.

KT obtained a letter from the Peninsular Malaysia Marine Department stating they were told the ship was being towed to Dubai for ‘repairs’, when in fact she was destined for the Indian breakers yard.

The liner, now renamed ‘Blue Lady’ by the current owners, Liberian shell company Bridgend Shipping, is anchored 35 nautical miles from Alang at Pipavav Port while she undergoes customs clearance. The vessel will then be boarded by a technical committee appointed by the Indian Supreme Court to assess the risk from asbestos used on the ship as fire retardant. The court is reserving its decision on whether to allow the ship to broken up in India until after the report has been completed.

The Khaleej Times understands that report will not be finished until the end of the first week of July at the earliest. It must then be submitted to the court, which will consider the findings and issue its order. Until then, the liner is only allowed in Indian territorial waters on ‘humanitarian grounds’ to allow supplies to be brought to the crew. According to a report in the Hindu newspaper K.V. Bhanujan, chairman of the Gujarat Pollution Control Board which is running the ship’s inspection, said it could be at least another month before the report is ready.

In the meantime, the ship and its owners are subject to a June 5 Supreme Court order stating permission to beach the ‘Blue Lady’ ‘may be given’ only if the inspectors declare the “vessel is not found to contain any other hazardous materials of a kind or quantity which cannot be safely moved, handled and disposed of at Alang”.

A source closely connected to Haryana admitted the breakers are discussing imminently beaching the ship because once the beaching is performed “it is almost impossible to reverse it”, a fact noted by the Supreme Court when it made its June order blocking the ship’s grounding and dismantling.

Environmental campaigners in India have vowed to ‘fight to the death’ to block the Blue Lady’s dismantling there. Gopal Krishna of the Ban Asbestos Network (BAN) in India said, “there is a great injustice before us and the global community must act quickly and in unison to stop it”.

BAN, which released its new report on the ship yesterday, says it has uncovered evidence showing Blue Lady's former owners, Star Cruises and their subsidiary Norwegian Cruise lines (NCL), broke the Basel Convention on the transport of hazardous waste in May 2005 by telling German authorities the ship was leaving Bremerhaven port to go for repairs in Malaysia.

But BAN’s investigation revealed information from NCL financial records that shows the company devalued the ship by up to $14.5 million in 2004, reducing it to scrap value. In the same year, BAN cites confidential information from a survey of the ship which concluded there were 1,200 tonnes of asbestos on board.

This information shows, BAN claims, that at least five months before the liner was moved to Asia — and 18 months before the ship was moved from Asia to India — NCL knew not only was the ship subject to international regulations on the disposal of toxic materials, but that it would never be repaired or resold for anything other than scrap. The Khaleej Times has also learnt that NCL inserted a clause into its sale agreement with Haryana that requires the breakers to pay a $2 million penalty if the ship is sold on for any other purpose than scrap.

Ingvild Jenssen, coordinator of a coalition of environmental group opposed to the SS Norway's destruction in India, said: “The management and board of directors of these companies should be held criminally and civilly accountable by the German government for their actions.”

Meanwhile, a consortium of UAE and US companies is continuing in its efforts to save the liner from the breakers. Project Dubai wants to buy the ship from the Indians and bring her to Dubai as a floating hotel, tourist attraction and convention centre. (see special report on page 34)

Project Dubai team has pledged to have the ship’s asbestos removed or made safe to the highest international standards before she is brought to Dubai. “We're absolutely committed to doing this by the book,” said John Voet, a Project Dubai partner. He added they would work with environmental groups such as Greenpeace to ensure any toxic material was properly treated and disposed of.

Mr Voet declined to comment on the latest allegations against Star Lines, NCL and Haryana. “We just want to resolve this to everyone's satisfaction so that all sides get what they want and walk away happy,” he said. None from Star Lines or Haryana could be reached for comment.