An exhaustive two-day search of the MV Nisha, the cargo ship seized in the Channel, has failed so far to find terrorist material linked to Osama bin Laden, Police said yesterday.
"No noxious, hazardous or dangerous substances have been found aboard the vessel," a spokeswoman for the Metropolitan Police said. "We re-emphasise that the ship doesn't pose a danger to people."
The search will continue today, but if nothing is found, the Indian-owned ship, carrying 26,000tons of sugar from Mauritius to London, could be released immediately.
If it transpires that the wrong vessel was stopped, Britain could face a multimillion-pound compensation claim.
The seizure is almost certainly linked to reports that British and US intelligence services are searching for the whereabouts of up to 20 ships reportedly linked to Mr Bin Laden's al-Qa'ida network. There are obvious fears that such a fleet, if it exists, could be used to carry terrorists and weapons.
Opposition leaders attacked the Home Officefor publicising the seizure of the Nisha before proving there was any threat. Dramatic television pictures of the raid renewed fears that London could be attacked with radioactive, chemical or biological weapons by al-Qa'ida.
The Government's discomfort deepened when Sudhir Mulji, the London-based chairman of the Great Eastern Shipping Company, the Nisha's owner, signalled that he would expect to be reimbursed if he could not sell his £9m cargo of sugar to his client, Tate & Lyle.
Tate & Lyle said it had already replaced the Nisha cargo with another shipment of sugar, and indicated that Mr Mulji's consignment was now regarded with suspicion because it could have been contaminated during the search.
The Nisha, which recently docked at ports in Djibouti, Eritrea and Aden close to suspected Islamic terrorist centres, was boarded by heavily armed Special Boat Service marines and Customs officers from the frigate HMS Sutherland 30 miles off Beachy Head soon after dawn on Friday.
The raid, based on a warning from a foreign intelligence agency, led to unsubstantiated claims that Canary Wharf and the City were potential targets.
The ship was taken to Sandown Bay off the Isle of Wight on Friday afternoon. At 11am yesterday, the Navy and SBS returned to base at Devonport. By late afternoon, only Customs officers were still on board.
Simon Hughes, the Liberal Democrats' home affairs spokesman, said: "We need to be assured that there isn't any other vessel which has got through the net. But if they do board another vessel, they should avoid the full glare of publicity. They will look pretty silly if nothing is found."