American environmental groups responsible for first blocking the deal in 2003 applauded its end as a victory for American recyclers, and for national environmental responsibility and self-sufficiency in toxic waste management.

In October 2003, the Basel Action Network and the Sierra Club, represented by Earthjustice, sued the U.S. Environmental Protection Agency and the U.S. Maritime Administration, MARAD, to prevent the resumption of U.S. exports of contaminated decommissioned naval vessels for scrapping abroad.

The suit alleged violations of the Toxics Substances Control Act, the Resource Conservation and Recovery Act, and the National Environmental Policy Act.

The U.S. District Court in Washington, DC ruled that four vessels could cross the Atlantic as their export was mandated by Congress, but prohibited the departure of the remaining nine until MARAD completed an Environmental Impact Assessment, obtained proper authorization to export toxic PCBs, and ensured the existence of an adequate dismantling facility in the UK.

Now, after three and a half years, MARAD has decided to annul the contract because the intended ship-breaker, Able UK, has been unable to obtain the permits required to conduct its business in Teesside, England.

"The death of this contract is good news for the environment and for American workers," said Martin Wagner of Earthjustice. "The management of U.S. toxic waste is a U.S. responsibility. Why dump our trash in other countries when we can take care of it here and create new jobs at the same time?"

It is expected that the nine ships in the James River will now be put up to bid for domestic ship recyclers.

It is unclear what will happen to four U.S. ships that sit rusting in Teesside. The vessels contain tons of materials contaminated with carcinogenic and toxic substances such as PCBs, asbestos, mercury, and used fuel.

Currently there are 238 old ships in the National Defense Reserve Fleet, most located in Texas, Virginia and California, that will need to be dismantled. The groups warn that some of the ships are in dangerous condition and pose an environmental threat as they have never been emptied of fuels, oils and other hazardous substances.

"Our precious Chesapeake and San Francisco Bays are no place for floating toxic time bombs," said Michael Town of the Sierra Club in Virginia. "The budget to remove these vessels and have them properly recycled here in America should have been appropriated long ago."