It is probably the worst example of mercury contamination in the UK

Nick Smith, British Waterways

Nick Smith, from the organisation's waste management team, said: "The upper levels of mercury allowed for open spaces are 20 parts per million, in terms of this length of canal we found levels of 12,000 parts per million.

"That is a problem which we identified and one which is probably the worst example of mercury contamination in the UK."

British Waterways cannot prove where the mercury came from but it believes a former bomb-making factory - which manufactured from 1876 to the middle of the last century - was the source.

Nick Smith: "High levels"

It is understood the company used a compound called mercury forminate which seeped from the factory, down a hill and into the canal.

At first it was thought the problem would be impossible to tackle. If the traditional heat treatment system had been employed it would have taken the best part of 100 years to complete the work.

Now the sludge-like grey material is being scooped out of the canal, put into a dredger and treated at a special plant.

Lime is added to the silt and the mixture is then turned into a cake-like form which is used at a special landfill site.

For the canal to be cleaned up fully, plant life has had to be removed.

British Waterways is confident the timescale will be met

But plans are in the pipeline to restore the wildlife corridor by reseeding the canal using plants from further along the waterway.

It is hoped the project will be completed by next summer.

British Waterways, which is responsible for most of the UK's canals, has pledged to make almost all of them navigable by 2001.

The agency owns or manages 2,000 miles (3,200 km) of inland waterways in England, Scotland and Wales and says 1,740 miles (2800 km) are already open to navigation.

It says it will restore or re-open 200 miles (320 km) of the rest within the next 18 months.

In Scotland the finished Millennium Link will mean it is possible to travel inland by water from Edinburgh to Glasgow.

At Falkirk, on a new section, a nine-storey high "Ferris wheel" will be built to transfer boats between the two systems, whose levels will differ by 25 metres.