The decision of the Supreme Court in Dublin means that Greg Bemis, 76, who became a co-owner of the wreck in 1968 and has since bought out the other two owners, can mount explorative dives.
Diving had been discouraged by the Arts and Heritage Ministry, which refused to grant an exploration licence. A number of diving expeditions, independent of Bemis, have been carried out on the wreck over the past decade. Bemis first dived the wreck in 2005.
The ship is now designated as a protected historic site under Irish law.
Under controversial circumstances the Lusitania, sister ship to Mauretania, was torpedoed in 91m of water by a German U-boat off south-west Ireland in 1915, while en route from the USA to England. A full complement of civilian passengers was aboard.
1198 people died, including 100 children. The action put considerable pressure on the USA to join the war on Britain's side.
Cargo included riches such as valuable paintings stored in sealed containers, owned by passengers from wealthy backgrounds. But Bemis has said that his main interest is in finding out exactly what caused the ship to go down so quickly, in an estimated 18 minutes, after a secondary explosion occurred on the ship's starboard side following a torpedo strike near the bridge.
One theory is that the ship was secretly carrying war munitions, and that these ignited after a torpedo struck. Others think an explosion in the liner's steam-generating plant could have caused major hull rupture. Yet others think that the sub may have fired more torpedoes than officially stated.
Examination is tricky because the wreck lies on its starboard side. Plans being considered by Bemis include divers entering through the port side and working their way down, or 'across', the ship to see if they can observe any meaningful evidence next to the seabed.
Bemis hopes to put together a provisional diving expedition this summer, before ramping up the exploration project in 2008. His licence to dive the site, granted by the Supreme Court, runs for five years.
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