The rich, pine forests stop on the western edge of the town of Nickel - then the nightmare begins. The town is like a set for one of the Mad Max films about life after nuclear devastation. But life, of a sort, goes on here in the Russian Arctic. Three tall stacks, high above wide, dusty streets and a once-beautiful landscape, testify to that life.

Nickel lies at the beginning of the vast Russian taiga, the belt of forest lands which join the great Russian steppe and the tundra. The three stacks which dominate the town, belching brown, poisonous fumes from a smelter, are part of a huge dilapidated black tomb, surrounded by a tangle of rusting pipes, silos and mountains of dust.

Old trucks creep along the rutted roads like cockroaches on an open wound. In front of the "cultural palace", Lenin still stands. And where the long shadows of the stacks fall, a moonscape begins.

Barren dust for miles, interrupted only where fire has not burnt the vegetation back to the earth, has made skeletal stalks of dead forests.

Some 800 square kilometres of this wilderness stretch past the neighbouring town of Zapolyarnyi. Chimneys there add to the devastation. Yet upwind to the west, the contrast could not be greater in the magnificent and thriving Pasvik nature reserve.

This Arctic disaster, 20 kilometres from the Norwegian and Finnish north-eastern borders and the Barents Sea is, in the words of the Norwegian Foreign Minister, Mr Bjrn Tore Godal, "the graveyard of the Cold War".

The workers of the Kola peninsula (Murmansk and its hinterland) are housed in the standard Russian flat complexes: long, dreary concrete boxes where ill-fitting windows do little to keep out winter gales in the three months of total night.

In the old days of the Soviet Union, the workers would have returned south at retirement. Now, with their savings wiped out by inflation, they have little choice but to stay and die here. That is if they live long enough to retire - average life expectancy for men here is 55.

That, we are assured by the town's chief environmental officer, Mr Vladimir Yevgenivitz, is a product of the social conditions and not the pollution. "My grandmother is still around at 82," he boasts unconvincingly.

A report on local health finds the incidence of chest illness in Nickel four times that of just 10 kilometres away in Norway's South Varanger.

Nickel is a real frontier town. Its 20,000 workers, drawn from the south by wages three times higher - now the best of them are on barely $200 a month - turn earth into the precious metal, nickel (after which the town is named). The foreign earnings from this kept alive the increasingly decrepit Soviet Union. Any environmental price was worth paying.

Nickel is now a source of huge embarrassment to Russia. However, like many other environmental sores in the former communist bloc, it has no cash to deal with the problems. The two plants at Nickel and Zapolyarnyi pump 246,000 tonnes of sulphur-dioxide and heavy metals into the Arctic sky every year - five times the annual total emissions of Norway.

When it rains, the chemical turns to sulphuric acid. The evergreen pines are affected first, stripped bare. Then birch. Then the lichen.

Local environmentalists fear that even if the available but expensive technology is brought in to filter the sulphur-dioxide, the contamination by heavy metals will ensure that it will be many years before the land can revert to forest.

Norway has offered $45 million of the $256 million required to clean up output. But in frustration at the continued failure of Moscow to provide the balance, it is threatening to withdraw its offer. Aid from international financial organisations to make the plant economically viable is conditional on the delayed clean-up.

And yet the visible damage done here to the beginnings of the taiga are nothing to the potential environmental time-bomb closer to the coast - the rusting remains of the Russian Northern Fleet's discarded nuclear submarines and the waste that no one has the money to store.

Today, the Barents Sea is still one of cleanest in the world - the major source of pollution there is actually Sellafield. The Irish Sea is five times as radioactive as the Barents.

But the Barents has enormous strategic significance to Russia as its only access to the North Sea. The result is that the northern shore of the Kola peninsula is packed with naval bases and yards. This beautiful area has nearly 20 per cent of the world's nuclear plants and, in unguarded fields, there are used fuel rods abandoned in rotting containers.

In one plant, the Kola nuclear plant, which supplies 60 per cent of the region's electricity, meltdown was averted only by minutes in 1994. Two of its four reactors are old and should be closed.

The problem is the same as at Nickel - cash and bureaucracy. Last year, the Northern Fleet owed the local shipyards some 200 billion roubles and delayed paying wages for months.

The situation is so bad that the high command has at least once used a nuclear submarine to make a commercial delivery of potatoes and fruit. It is now considering a range of cash-raising options: selling off submarines for scrap; transporting oil under the polar ice cap; and charging tourists for trips.

And bureaucracy compounds the problems, with customs officers demanding duty on imported supplies donated by foreign governments - in the case of the Kola plant, emergency generators sat for months at the border.

There are some signs of a slow local economic recovery, though with all characteristics of the faltering Russian economy. Nickel now boasts a new tourist shop - its predecessor was demolished recently by a runaway tank - and its thriving market has a wider range of goods, although at a price.

"At least here our wages are paid," said Mr Yevgenivitz.

Zapolyarnyi's hotel has been refurbished luxuriously - the word is that the money came from the foreign exchange earnings of nickel exported as another commodity. New money in Russia has dubious credentials.

Yet there is no doubt that the resources required to clean up Nickel and the Kola peninsula cannot be generated locally. Inevitably, foreign cash will be limited by a wish not to prop up Russia's military potential.

Sooner or later - preferably sooner - hard-pressed Moscow will have to be prevailed on to come up with the means to reverse one environmental disaster and to prevent, in the words of a Norwegian environmentalist, another "slow-motion Chernobyl in the making".