Green campaigners have halted a multi-million-pound contract for British Nuclear Fuels to build a waste incinerator in the United States, adding to uncertainty over the company's future.

The environmentalists succeeded in having plans postponed for BNFL to construct the incinerator 100 miles upwind of the nation's oldest and largest national park, Yellowstone.

The US Energy Secretary, Bill Richardson, confirmed the move as part of a settlement with environmental groups that had sued over the plan, fearing toxic particles would drift downwind, contaminating the land and water with fallout.

But the development does remove a hurdle to BNFL building the rest of the £300m waste processing plant - minus the incinerator part of it - which had been on hold during the legal wrangle.

And the embattled company said it would now be able to proceed with construction on a quicker timescale.

A spokesman said its contract to treat waste still stood, and it was now working on an alternative method of disposing of the 20 per cent of the waste which was to be incinerated. BNFL plans to have the waste transported to another disposal plant in New Mexico.

A US Energy Department spokesman said the development would not make a significant difference to the contract.

On Monday, the German Environment Ministry said BNFL had lied when it said, in a press statement, that Germany had agreed to lift its ban on importing reprocessed nuclear fuel from the Sellafield plantin Cumbria.

The accusation, denied by BNFL , came as the company found itself under renewed pressure from Ireland and the Scandinavian countries to end its waste reprocessing operation at Sellafield.

Joe Jacob, the Irish Energy minister, said yesterday that the British Government could be forced to close Sellafield by the end of June, under proposals that are to go before an international body which monitors marine pollution.

The Prime Minister's official spokesman said earlier this week BNFL must "raise its game" in the light of recent safety concerns.

"They are operating in a commercial environment. They have got to meet the seriousdemands of their customers," he added.