Friends of the Earth says that exporting the 'ghost fleet' from the US, rather than dismantling them in the country of origin, sets a precedent and makes it more likely that ships will be exported to developing countries for disposal.
"We are trying to prevent the international trade in toxic dumping," said Mike Childs, Friends of the Earth campaign director. "The ideal is for each country to dispose of its own waste, but in practical terms, two or three facilities in Europe would be sufficient. We've said from the outset that the UK has to deal with its own waste."
Greenpeace is urging the Government to take the lead in banning British naval ships from being broken up on the beaches of India and Bangladesh.
In 2000, two Royal Navy ships were decommissioned at the ship-breaking yard at Alang, 200km north of Mumbai. Greenpeace India revealed horrific conditions at the site.
The ships are mainly made of recyclable steel, but also contain a range of toxic materials including fuel oil and lead.
"Ships are run onto the beach where they are broken apart by hand," said Simon Reddy, Greenpeace policy director. "There are explosions every other day and regular deaths.
"In Alang, people don't know about asbestos; women carry it away on their heads, and because the communities are so poor, people mix the dust in with water to use in construction," he added.
Last month, Greenpeace, the trade union GMB and Hartlepool MP Peter Mandelson launched a campaign for all EU ships to be decommissioned and recycled in specialist shipyards in the EU.
The NGO says that ships should be decommissioned in well regulated conditions to protect both workers and the environment.