A company which supplies whelks to the Far East has lost a legal bid to recover hundreds of thousands of pounds of lost profits following the Sea Empress disaster off west Wales.

The fish-processing company from Exmouth in Devon had tried recover �650,000 from the International Oil Pollution Compensation Fund following the huge oil spill off Milford Haven six years ago.

More than 1,000 people were involved in the clean-up

But High Court Judge Mr Justice David Steel ruled on Wednesday the claim by RJ Tilbury & Sons was "too remote."

He said to allow it would leave the compensation fund "exposed to an indeterminate number of claimants along an infinite chain".

The disaster in February 1996 in which 72,000 tonnes of crude oil poured out onto the coastline after the Norwegian-owned tanker struck rocks was Wales's worst pollution incident.

The judge said claims arising out of the grounding had already reached �34m.

The tanker's owners were liable up to �7.4m of the claims with the compensation fund responsible for the remainder.

A limit on the claims was unlikely to be reached, the judge said, which was why the fund has contested the claim by the fish-processing company.

A whole range of potential claimants can and do emerge from an oil spill

Mr Justice David Steel

The company has a long term contract for supplying Welsh whelks to the "lucrative Korean market, the alternative of Grimsby whelks being far less prized", said the judge.

It also had supply contracts with fisherman who operated in the whelk grounds between Tenby and Saundersfoot in Pembrokeshire.

However, a total fishing ban in the area for six months after the spill meant the Exmouth processing firm claimed a huge dent in its profits.

The judge said he accepted the escape of oil into the sea was the legal cause of the company's loss, but he ruled that the claim would open up the compensation fund to a huge number of potential claims.

The fund had emphasised the need for a control mechanism on what claims could be brought, he said.

"A whole range of potential claimants can and do emerge from an oil spill."

The Korean market for Welsh whelks is lucrative

"Fishermen, hotel owners, suppliers to hotels, suppliers to fishermen, fish processors, public authorities, restaurants, shops, etcetera."

He added the claims were also infinitely variable - "loss of sales, loss of tax revenue, loss of bookings, loss of goodwill, costs of marketing campaigns and so on."

The Sea Empress oil spill was the third-largest tanker spill in UK waters.

Around 120 miles of coastline were polluted in the Haven and between Cardigan Bay and Pendine Sands.

An official inquiry into the disaster partly blamed the inadequate training and inexperience of a port authority pilot.