Larger cruise ships coming to Bermuda could spell an environmental and economic disaster.

The warning was sounded yesterday by the Bermuda National Trust (BNT).

The Trust also confirmed Government had told it that larger cruise ships would not be entering the Island via Town Cut, St. George's.

The Trust's comments come in the wake of the grounding of the cruise ship on coral last Wednesday.

In a release yesterday, BNT said it was concerned about the lack of effective laws to determine liability, compensation and penalties for irreparable environmental damage.

"As highlighted last week, a small cruise ship ran aground while navigating a frequently used channel, one that it has transited many times previously," the BNT release said. "The risk of such incidents will increase in the future if the proposed larger panamax and post-panamax ships come to Bermuda. A collision of a larger ship with the outer reef will undoubtedly be both environmentally and economically catastrophic."

Ships classified as panamax are of the maximum dimensions that will fit through the locks of the Panama Canal. This size is determined by the dimensions of the lock chambers, and the depth of the water in the canal. Panamax is a significant factor in the design of cargo ships, with many ships being built to exactly the maximum allowable size.

When asked whether Norwegian Cruise Lines should be held liable, BNT director Steve Conway said Government was still investigating the extent of the damage to the reef.

"We are waiting to see what is announced on this before we can form an opinion," Mr. Conway said. "However, we are confident that regardless of the issues of strict legal liabilities the Norwegian Cruise Line will meet the responsibilities in this situation."

The BNT director also said while it was difficult to assess the cost of the reef damage caused by the Norwegian Crown, penalties should be high enough to deter further damage.

"Since the reef destroyed cannot be rebuilt by man, our only course seems to be to ensure that if penalties are imposed they should provide a strong deterrent to damaging the reef," he said. "We will comment further when a statement is made by the Government on the incident."

The Trust said the cruise ship crash demonstrated a critical need to adopt recommendations of a Ministry of Environment June 2005 White Paper on the marine environment which would make it an offence for a vessel to run aground, with consequent compensation and penalties to be applied should environmental damage result.

BNT commissioned a report, 'Cruise Ships and Sustainability in Bermuda' ? available at www.bnt.bm ? because the Ministry of Tourism and Transport proposed major changes to all three of Bermuda's ports in order to meet the anticipated move in the cruise industry to larger cruise ships, it said.

And it was since the report by Boston-based, Industrial Economics Inc. (IEc) had been completed that the Trust said it was pleased to hear from Government that a decision had been made not to pursue any proposals to change Town Cut to allow post-panamax cruise ships ? too big to fit through the Panama Canal ? into the St George's Harbour.

"We believe that the Trust's involvement in the process was beneficial in reaching this decision," the release said. "At the same time the Trust has been advised that the Ministry is focusing its attention on Dockyard as Bermuda's principal mega cruise port with a proposed second berth to the north of the existing dock."

The IEc Report also established that since Government had failed to produce any environmental impact studies to date, there was an urgent need for it to consider the environment as a priority rather than an afterthought during its port development plans.

"Government must finance professional baseline studies to enable an informed evaluation of all development options, identify key issues and concerns, collect vital information, identify alternatives and finally, establish mitigating measures to minimise the potential adverse effects," the IEc Report said. "There is an urgent need to establish, as practice, an effective process for intergovernmental communication facilitating discussions of major development concepts and to hold a comprehensive public consultation."

The release also said Bermuda's environment was the foundation for all present-day and future economic development. "It is the mirror of each individuals' personal quality of life," it said. "Any policy or decision which contain the possibility of fundamentally altering that environment must be approached with the utmost care and attention."

A Tourism and Transport Ministry spokeswoman said she would respond to the release today.