The first of four ships arrived on Teesside in November 2003
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Controversial plans to scrap former US naval vessels at a Teesside yard have been thrown out by councillors.
Able UK, which had won a contract to dismantle up to 13 so-called ghost ships at its facility in Graythorp, Hartlepool, said it would appeal.
The plan has been dogged by debate over the environmental impact it will have on the surrounding area and wildlife.
Councillor Edna Wright told the meeting she did not want the town to become the toxic waste dumping ground of Britain.
Three planning applications and a hazardous substances consent application were put before the council's planning committee at a meeting at the town's civic centre on Thursday.
After a four-hour meeting, councillors rejected the proposals despite planning officials recommending they be approved.
Able UK chairman Peter Stephenson said he wanted make sure the town did not miss out on an opportunity to establish it as a centre of excellence for recycling and wind power.
He said: "We will clearly have to consider the issues very carefully after the outcome of today's meeting but one thing is clear - we will be lodging an appeal.
"There is a desperate need for world-class ship recycling facilities in the UK and the rest of Europe and there is overwhelming evidence that our facility can and should be developed to meet that need."
The first of four ships arrived on the River Tees on 12 November 2003, but decommissioning work could not begin until planning permission was approved. No date has yet been set for the transport of further vessels.
Able UK had been forced to carry out extensive environmental assessments following concerns about potentially toxic elements of the ageing naval vessels.
The firm's plans included extending the site to cope with ships of all types, as well as constructing metal recycling facilities and wind turbines.
At the council hearing, presentations were made by the company and by objectors.
Able UK had claimed hundreds of new jobs would be created if it was allowed to go ahead with the decommissioning work.
Oils and oily ballast water could cause damage to the marine environment.
Asbestos is a known carcinogen but is denser than water and non-soluble.
Polychlorinated Biphenyls (PCBs) have been called "probable carcinogens" and have been linked with neurological and developmental problems in humans.
Mercury, lead, chromium and cadmium are highly toxic metals which accumulate in the body.
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