An official report seen by The Times concludes that the ship, now at anchor six miles (ten kilometres) off the southwest coast of India, should be allowed to be tugged into Alang, in the western state of Gujarat. The report, by a government-appointed inspection team, rules that the SS France is fit for dismantling, despite the presence of significant amounts of asbestos.

It concludes: “No other hazardous material of any kind or quantity was found that cannot be safely removed, handled and disposed of at Alang.”

Greenpeace and another environmental pressure group, Platform on Shipbreaking, say that the decision, expected to be upheld by the Supreme Court, violates the UN Basel Convention and a 2003 law banning the import of asbestos waste to India. Activists say that the ship should be recalled for decontamination to Bremerhaven, Germany, from where she sailed last year, because she contains 1,200 tonnes of asbestos and would represent an environmental hazard if broken up in India.

“Decontamination has not happened,” Gopal Krishna, of Ban Asbestos Network India, said. “It is no longer acceptable to dump toxic waste ships on some of the poorest, most exploited workers in the world.” In February the French authorities had to cancel the dismantling of Le Clemenceau in India after it emerged that she was loaded with asbestos.

The SS France, beloved of French aristocrats, artists and Hollywood actors, once symbolised luxury on the high seas, with her sweeping staircase, elegantly modern decor and fine dining. Her maiden voyage to New York, in 1962 was graced by President de Gaulle’s wife, Yvonne, who had previously launched the 11-storey liner.

Today the 46,000-tonne vessel, renamed the SS Norway in 1979 and lately called the Blue Lady, is rusting and without propulsion after an explosion in her boiler room three years ago.

Even Bangladesh, the world’s biggest shipbreaker and not noted for raising concerns about such matters, turned her away. Since then she has been tugged round the world in search of a resting place. That place looks certain to be Alang — an unspoilt beach before it became a dumping ground in 1983. Shipbreaking is big business in Asia, supplying scrap steel to a region hungry for industrial materials. Critics say that the workers are frequently poor migrants who risk death and dismemberment in accidents and slow poisoning from toxins.

A Greenpeace report in 2000 showed that workers at Alang were exposed to asbestos 24 hours a day. Deadly fibres were found not only at the yards, in the living quarters and in the waste dump, but also inside local Hindu temples. The International Metalworkers’ Federation says that an average of 50 shipbreaking workers are injured every day in India.

This month the Ship Decommissioning Industries in Paris told Pradipto Ghosh, the Indian Environment Minister, in a letter that it had identified other hazardous substances, including mercury compounds and heavy metals, when it inspected the ship in Germany before she was towed to Malaysia and to India. “We are convinced that a large pollution may result if the de-pollution is not properly handled, jeopardising human life,” Briac Beilvert, of the organisation, said.

The case has been complicated by uncertainty over ownership. According to a bill of sale dated January 19, the ship was sold by Norwegian Cruise Line, a subsidiary of the Malaysia-based Star Cruises, to Bridgend Shipping, a Liberian-based company, for $10 (£5.36). Since then, Haryana Shipbreakers, based in Bombay, is thought to have bought her. Her scrap value is $12.3 million, according to Norwegian Cruise Line’ s accounts, which is less than the cost of asbestos decontamination.