The Blue Lady is due to reach Indian waters by the end of May
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India's Supreme Court has called in experts to investigate if a disused vessel is carrying any toxic material.
Environmentalists say the Blue Lady, which is due to be dismantled in India, is carrying 900 tonnes of toxic waste.
The court has asked the experts to submit their report on the material being carried by the Malaysian ship by 8 July before making its final ruling.
The former cruise liner, originally named the SS France, was banned from Bangladeshi breaking yards in February.
Health impact
Ban Asbestos Network, a non-governmental organisation, told the BBC's Jyotsna Singh in Delhi, that the court ruling was a temporary relief.
"At least until July the ship cannot enter Indian waters," said Gopal Krishna. "But we will await a final ruling in the matter."
Greenpeace said the 11-storey 315-metre-long (1,035-foot) ship was on its way to the Alang ship-breaking yard in the western state of Gujarat.
The organisation said the Indian government had failed to support the ship-breaking industry in improving condition for workers.
In February, France recalled the asbestos-lined carrier, the Clemenceau, following widespread protests in India.