A FALMOUTH company plans to decommission oil tanks it admitted have been polluting the River Fal for years – by building luxury homes.
It has emerged that the Environment Agency was aware underground tanks at Azure Oil Services's Middle Point facility are failing, with "extensive and aggressive contamination" of the estuary.
Environmentalists are demanding urgent action at the Castle Drive site.
Details came to light when plans for a housing development were unveiled as a way of raising the money for remediation works – estimated at up to £3.8 million.
Azure is working with CSA Architects and Westcountry Land Ltd on the scheme for 14 luxury homes.
In a pre-application report to Cornwall Council, CSA said: "There is wide-spread, extensive and aggressive contamination leaching into the watercourse.
"It will continue unless the site is remediated. This has been deemed to pose a high risk to sensitive controlled water."
Betty Levene, of Falmouth Friends of the Earth, said: "Once again, it's the health of our marine environment that's being afforded scant regard."
David Hines-Randle, of Azure, said the contamination dated back to the war when the site opened and that since becoming owner, the company had spent "hundreds of thousands of pounds" addressing the problem and carried out regular monitoring.
"Middle Point has been a valuable asset to the port, but has now almost reached the end of its useful life and needs to be properly dealt with, which is what we aim to achieve," he said.
A spokesman for the Environment Agency, which has been advising Azure, said: "Work to improve the situation is continuing."
The site is currently used by Falmouth Petroleum Ltd, whose lease will not be renewed next year.
Westcountry Land and CSA director Justin Dodge said: "We don't think people realise the serious underlying issues of this site. I was appalled to learn of the pollution of the water and that it will continue after the closure."
This new plan replaces a controversial scheme put forward last year for 135 houses.
Local environmentalist Miles Hoskin said: "From Pendennis Point you will see a permanent oil slick running out from the site. I would defy anyone to conclude that it is anything other than disgusting and unacceptable."