Export-Import Bank and the Overseas Private Investment Corporation have supported fossil fuel projects worldwide without considering the potential harm to the planet, according to the complaint.

The suit asks the court to compel OPIC and Ex-Im, whose directors are appointed by US President George Bush, to comply with environmental regulations and shift funding to alternative energy sources and conservation programs.

"This lawsuit is part of a broader effort to realign economic and industrial activity with ecological constraints," Mayor Jerry Brown of the California city of Oakland told AFP on Thursday.

Judge Jeffrey White ruled on Wednesday that environment groups Greanpeace and Friends of the Earth and the US cities that united to file the suit have legal standing to make their claim and a point worth pursuing in court.

"It is profoundly important because it is a major step forward in holding these agencies to a rule of law, in this instance a rule of environmental law," Brown said of the ruling.

OPIC and Ex-Im ignored national Environmental Protection Act mandates while approving more than 32 billion dollars in loan guarantees and insurance for oil and natural gas projects in the past decade, the suit charged.

Projects included the largest new oil fields in South America, Russia, Southeast Asia, West Africa, Mexico and the Caspian Sea region, according to the suit filed in 2002.

Carbon dioxide gas from fossil fuel use has warmed the atmosphere, causing storms, droughts, floods, rising sea levels and other environmental mayhem, environmentalists argued in court paperwork.

Bush, a former oil man, has expressed skepticism about global warming and refused to sign the Kyoto accord on climate change endorsed by the European Union.

"Bush is only going to be around for a couple more years, and the evidence of global warming has grown," said Brown, a former California governor. "These agencies should act on their own. This issue is recognized by scientists and world leaders."

Projects supported by OPIC and Ex-Im are responsible for nearly eight percent of the world's annual carbon dioxide and methane gas emmissions, the judge noted while giving the case a green light to proceed to trial.

"This ruling is a wake-up call for the federal government to tackle the growing environmental and human impacts of global warming," Friends of the Earth director Norman Dean said in a written release.

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