The "Blue Lady" is anchored along the coast of Alang in the western state of Gujarat.

India's top court granted permission for the ship to be dismantled after reading a report by technical experts that it had appointed to study the matter, the Press Trust of India news agency reported.

Environmental groups like Greenpeace had alleged that the ship contained radioactive material and asbestos which could hamper the lives of the laborers dismantling it and had taken the matter to court.

"We are extremely disappointed by the ruling," Greenpeace said in a statement. It also claimed that "Indian law prohibits the import of hazardous waste to India. Because of massive pressure, among others from the shipbreaking industry which currently has very few clients, the supreme court has given permission to break the ship without demanding that the hazardous materials be removed first."

The purchaser of the ship said that dismantling work would begin as soon they have a copy of the court's orders.

"The dismantling process will take over a year. The fears concerning the radioactive material have all been cleared and whatever asbestos is there in the ship will be handled and disposed off in the most professional manner," Sanjay Mehta told PTI.

International and local environmental and labor groups have for years urged Indian authorities to sharply curtail -- or simply stop -- the work being done at the Alang shipbreaking yard, where old ships are run aground in the shallows just offshore and then dismantled largely by hand.

Old ships are not broken up in the West because they are full of dangerous materials, including asbestos, that would not pass health standards.

That has made Asia -- where regulations are often lax or nonexistent -- a cheap alternative.

India once led the industry, but breakers here say they are losing business to neighboring Bangladesh.

In both countries, the breaking is done largely by uneducated migrants who are given little safety training or equipment, and earn only a dollar or two a day -- twice as much as they could make in the villages and towns where they come from.