They dismissed a legal challenge by environmental campaigners to prevent the huge ship being dismantled at Able UK's Graythorp yard, on the outskirts of town.

Protesters: The fight goes on

The 800ft vessel, which has previously been banned from ports around the world on safety reasons, is now set to arrive in Hartlepool by the end of December, with work due to start next March.

Disappointed campaigners admit the ruling essentially signals the end of any further legal challenges.

Able UK boss Peter Stephenson said he hoped it would be the end of the controversy surrounding ship recycling at Graythorp, and described the legal challenges as "a waste of time and money".

After Able UK secured the multi-million pound contract with the French Government, the Health and Safety Executive (HSE) granted the company an exemption to asbestos regulations to allow the ship to be dismantled here.

That sparked the legal challenge by Friends of Hartlepool who claimed the HSE acted "unlawfully" in granting the exemption.

But Lord Justice Rix, sitting with Lord Justice Dyson and Lord Justice Jackson at the Royal Courts of Justice, dismissed their argument at a hearing yesterday. They gave their ruling but will deliver a full judgement on their reasons at a later date.

"Able UK, recently at the centre of the controversial ghost ship row won the contract, worth between £1.98m and £3.16m from the French Ministry of Defence to dismantle the Clemenceau, now known as the Q790.

The ship has a controversial history, having been turned away by the Indian Supreme Court in December 2005.

In 2003, Spanish ship breakers attempted to export the Clemenceau to Turkey, but failed when the Turks refused to accept it. In the same year, a German broker's attempt to export the ship to Bangladesh, following decontamination in Greece, failed when Greece refused entry.

The HSE exemption was challenged by Jean Kennedy, on behalf of Friends of Hartlepool and backed by a French trade union, the Confederation Generale du Travail and maritime environmental group Mor Glasz.

The group was supported by the Public Interest Lawyers (PIL) group, which handles high-profile environmental cases.

Lawyer Gavin Sullivan, who was at the hearing in London, told the Mail: "We are disappointed with the outcome of the court.

"We will have to consider the reasons for the judgement quite closely to see whether this is the end of our legal challenge."