A report leaked to The Royal Gazette shows Government could face an environmental nightmare as it strives to clean up the former US baselands of toxic waste.

On Friday, Government announced a deal which absolved the US of paying for the clean up of pollution at the bases in Southampton and in St. David's.

However, a 1995 Government report summarising other studies showed there were 30 areas of significant pollution, with some posing an imminent and substantial danger to public safety.

At Morgan's Point, polluted caves contain industrial materials and raw sewage, fuel storage and pipelines, a landfill and spills from hazardous material.

The cave system extends to within a few hundred metres of 75 private fresh water wells and the Port Royal fresh water lens, which supplies the western third of the Island according to the report.

There is a central chamber containing a deep pool of waste oil and other petroleum products floating and washing through the cave system.

Analysis of the oil showed toxic metals such as mercury, lead, cadmium, chromium and copper.

There are 134 underground petrol tanks - 60 percent of which have leaked into the soil or contaminated water. The report said that many sites pose an unacceptable risk to future users.

A landfill site at the edge of Castle Harbour contains heavy metal waste, petroleum hydrocarbons and by-products of incineration which were washing and leaching into Castle Harbour.

Asbestos was contained on 70 percent of the 2.5 million square feet of former US baseland buildings said the report, with 25 percent containing 'friable asbestos' in a damaged state.

Some 80,000 linear feet of asbestos water piping and 60 manholes full of asbestos insulation are dotted around the sites.

Despite a 1990 US Navy report indicating asbestos be removed, the majority was still there several years on, said the report.

However the Government's gloomy 1995 report contrasted with a later study compiled in 2000, which showed damage was not as bad as expected.

An ERM (Environmental Resources Management) report contradicted earlier findings that there were unacceptably high levels of contamination.

A 1997 US navy report done by JA Jones Environmental Services of North Carolina estimates the clean up bill would be $56.5 million with more than $33 million going to asbestos removal, while the replacement costs for Longbird Bridge would top $9 million.

It noted that there were 600 tons of soil heavily contaminated with lead and 8,000 tons of soil contaminated with petroleum and solvents.