French President Jacques Chirac has ordered the asbestos-lined warship Clemenceau to return to France after a ruling by the country's highest court.
The Clemenceau left the French port of Toulon on 31 December
The State Council demanded an end to the transfer of the decommissioned ship to a breaking yard in India after complaints from environmentalists.
Greenpeace and three anti-asbestos groups said the ship was an environmental and health hazard.
The ship is in the Arabian Sea after India refused entry to its waters.
India said it wanted more information before allowing the 27,000-ton decommissioned aircraft carrier to enter its waters.
A statement from Mr Chirac's office said: "The president has decided to put this ship in French waters on a position of standby which offers all security guarantees until a definitive solution for its dismantling is found."
Greenpeace welcomed the decision as a "victory for Indian workers" and a warning to rich governments who sought to dump toxic waste on poor countries.
Ship breaking yards in India's western Gujarat state are badly in need of work as contracts move elsewhere.
The head of the Alang yard, where the Clemenceau was headed, told the BBC it was a prestige project but recalling the ship would have little effect on the yard's future.
"Alang is already in a bad way. Only 25 out of 180 plots are operational so one ship wouldn't have made a lot of difference," port officer Kiritsinh Gohil said.
The BBC's Caroline Wyatt says the Clemenceau has proved a toxic headache for France, with this just the latest chapter in a series of embarrassments.
The Clemenceau was decommissioned in 1997. It was later auctioned off to a Spanish firm, which planned to remove the asbestos before breaking up the ship.
Greenpeace has led campaigns against the Clemenceau in India
But that could not happen within the European Union because of health and safety laws.
Later, the French navy had to board the ship as it was headed for Turkey for dismantling and return it to France.
A German firm then took up the challenge which resulted in the journey to India for decontamination. On route, it has been held in Egypt for a week over doubts about its safety and then blocked by the Indian authorities.
On Tuesday, the French defence minister announced an inquiry to clarify how much asbestos had been stripped from the French warship before it left.
Michele Alliot-Marie said there was a 30-ton discrepancy between the amount a French firm said it had removed and the amount received at a waste site.
The decision by the State Council, France's highest court, takes effect immediately. The case now goes back to a Paris administrative court for a detailed legal ruling, which could take up to six months.
Mrs Alliot-Marie said the Clemenceau would return to the military port of Brest via the Cape of Good Hope in South Africa.
Correspondents say the controversy has been an embarrassment for the French government, especially as it comes ahead of Mr Chirac's five-day trip to Thailand and India, starting on Thursday.