Well-known US attorney Kenneth Feinberg has told Bhopal plaintiffs that he would agree to serve as a mediator in their US lawsuit at no charge, according to documents filed in Manhattan federal court.

The Bhopalis' lawsuit contends that Union Carbide Corp, now owned by Dow Chemical Co, should be held responsible for widespread water and soil pollution allegedly caused by the December 1984 toxic gas leak at its pesticide plant in Bhopal.

Thousands of people died in the aftermath of the gas leak, called the world's worst industrial disaster. Bhopalis and environmental groups say many more people have been harmed since then by pollutants seeping out of the plant site, which the plaintiffs say have caused health problems including cancer, growth retardation and dizziness. They accuse Union Carbide of never properly cleaning up the site.

The appointment of a mediator could be a possible step toward ending the litigation, which was first filed in 1999. But Union Carbide, which is fighting the plaintiffs' claims, has not agreed to any mediation in the case.

"We do believe that the proper venue is the trial court, and that we should continue with those proceedings in that court," Union Carbide spokesman Tomm Sprick said on Monday.

The plaintiffs have argued that US District Judge John Keenan, who is overseeing the case, has the power to order the parties to mediate, even without Union Carbide's consent.

But even if mediation were ordered, which is typically nonbinding in such cases, it is unclear how effective it would be if one side is an unwilling party.

Union Carbide paid $470 million in damages to the Indian government in 1989 for victims of the gas leak. In contesting the plaintiffs' claims in the water pollution case, it has argued that responsibility for the environmental conditions around the Bhopal plant lies with Indian authorities.

The plaintiffs' case got new life in November when it was revived by a federal appeals court, which said the district court made a mistake by throwing it out.

A lawyer for the plaintiffs, Richard Lewis of law firm Hausfeld LLP in Washington D.C, said he thought the appointment of a mediator would be a major development in the long-running case.

"This is a notorious environmental problem that has been begging for a response for decades now," Lewis said. "We have a unique opportunity to break through the logjam that the parties have been at for all of these years."

Feinberg, founder of law firm Feinberg Group LLP, is best known for his role as the special master of the Sept. 11th Victim Compensation Fund, which provided compensation to victims of the 2001 attacks and their families.

He declined to comment on the Bhopal case to Reuters, saying only that the court papers outlining his willingness to mediate in the matter "speak for themselves."

The case is Sahu et al v. Union Carbide Corporation et al, US District Court, Southern District of New York, No 04-08825.