Hungary has said it will take immediate action to clean up a disused Budapest chemical plant after Greenpeace warned of a potential environmental catastrophe at the site.

The environmental group last week described conditions at the defunct Budapest Chemical Works as "near catastrophic," with rusted barrels full of inflammable and toxic materials stored in the open air.

Gergely Simon, a chemicals expert for Greenpeace, said that chemicals such as benzene were leaking into the groundwater as far as 60 meters below the surface and at concentrations up to 100,000 times permitted limits.

Initially, the Hungarian government said that it would take months before the chemicals could be removed from the site and the area cleaned up. However, a Hungarian official quoted by the Associated Press on Thursday said that the deteriorating condition of the hazardous material meant that swift action was necessary.

Richard Tarnai, commissioner of the Pest County office, explained that removal of 1,000 barrels of the most dangerous waste would start at once, and the rest of the estimated 2,800 tons of hazardous waste would be taken away within the coming months.

The announcement was cautiously welcomed by Greenpeace.

"We hope removing the barrels is not the end of the story. Some of the waste has leaked into the ground, potentially exposing the local population to risk," Gergely Simon told news agency AFP.