The government has said it will re-examine the circumstances surrounding a deal to bring a fleet of so-called 'ghost ships' to the UK for dismantling.
Four ships have already left the James River in Virginia
The controversial deal to bring 13 US ships to Hartlepool was originally approved by the Environment Agency.
It was blocked last week because of a planning wrangle when the agency withdrew its approval for Able UK's contract with US authorities to dismantle the vessels.
The agency said it was concerned planning and environmental requirements for the dry dock dismantling had not been met - a claim disputed by Able UK.
But the Americans have insisted the ships - which are contaminated with chemicals including PCBs, asbestos and heavy diesel - continue their journey across the Atlantic.
Four of the 13 vessels have already set off from their moorings on the James River, Virginia, and are due to arrive by the middle of November.
The Conservatives called for an urgent inquiry into "muddle and confusion" surrounding the now blocked plan in the Commons on Monday.
Environment Minister Elliot Morley, answering an emergency Commons question, said there must be a "full evaluation" of the issues.
Mr Morley said that when the agency first consented to the shipment, it was
satisfied Able UK had the "technical and physical ability to deal with the
ships in an environmentally sound manner".
The UK-bound vessels had also been verified to be seaworthy, he added.
But the shadow environment secretary, David Lidington, demanded an urgent inquiry into the "crisis".
He said: "I think there will be near unanimity that a way needs to be found
of disposing of these vessels safely without damage to the environment.
"But how has the government and its various agencies got itself into this
Mr Morley said US authorities had been contacted about the problems on 3 October but the ships still sailed on 6 October.
He said: "The agency did act on the doubts that were emerging and advise that the ships should not leave until they were resolved."
Labour MP for Newcastle, Jim Cousins, said there must be no question of the ships arriving off north east England, not gaining admission to their destination and remaining "parked there" endangering local residents.
Former Cabinet minister Peter Mandelson said Able UK`s facility, based in his Hartlepool constituency, was chosen because of its high standards of environmental and employee safety.
He said: "The world will be an environmentally cleaner and less hazardous place with the safe disposal of such ships where they can be expert and professionally dealt with, as Greenpeace itself has observed."
Friends of the Earth director, Tony Juniper, said the government should make
clear it was not prepared to take the vessels.
He said: "The most sensible option is for these boats to turn round and be safely disposed of in the USA which already has the capacity to deal with them."