As courts hear legal challenge to stop exploration John Vidal joins squatters on a little bit of empire.

FROM 10 miles away Rockall is nothing but a foamy speck in a million square miles of slate-grey, heaving Atlantic, barely registering on the radar of a gannet.

From two miles, the stump of granite 289 miles from the Scottish mainland could be a giant barnacled whale, suspended in contorted trajectory. From 50 yards off in an inflatable dinghy bobbing around in a force 6 gale, the perpendicular 80ft cliffs are terrifying.

We are seasick after 23 hours sailing due west from the Outer Hebrides, but the landing orders are simple enough. When the rubber dinghy gets under the cliff, we are to wait until the swell is at its highest. The rest is obvious: we must leap on to a narrow pot-holing ladder that hangs down the western cliff.

There have been more landings on the moon than on Britain's most recent addition to empire, and Rockall flirts with anyone who dares to land on it from the sea.

Twice the bolted-on ladder offers itself to the dinghy. Twice we are swept out of reach. The third time, as two formidable waves sweep round from Rockall's north and east flanks, we are lifted 20 feet, right into the rock.

An airborne lunge at the ladder, a thump as you hit the rock wall, and 10 minutes of knuckle-grazing climbing later and we are on Hall's Ledge, the only remotely flat spot on Britain's most remote and inhospitable territory.

As British, Faroese and Danish diplomats continue talks to determine who has the oil rights to disputed parts of the North Atlantic, the war of the last industrial frontier gathers pace.

Seventeen oil companies, including BP, Shell and Texaco, were given licences in April to explore the Rockall Trough and the seas west of Shetland for oil and gas deposits. They are already mapping the ocean bottom with seismic ships. If as expected, their finds are significant and accessible with new drilling technologies, it could extend the global petrol/carbon economy another 30 years.

Ranged against the world's most powerful industry, and harassing its activities by dropping swimmers into the water in front of the survey ships, is Greenpeace. The international environment group argues that to exploit this new oil is economically unnecessary and ecologically dangerous.

Greenpeace seized Rockall on June 10 and renamed it Waveland in protest at industrial development of what industry calls the Atlantic Frontier. In the latest symbolic action, the Queen has been issued honorary nationality of Waveland: her passport is stuffed in a black plastic bin bag behind the brass plaque left by the Royal Marines who in 1955 formally annexed the island for Britain.

The Government says it is unconcerned at the occupation, but has sent at least one Nimrod aircraft to observe the "invasion".

Today in London, Greenpeace moves from a symbolic to a legal challenge, and will take the Government to the High Court, arguing that Britain has acted unlawfully by issuing licences while not applying two European environment directives, in place since 1988.

They are seeking leave for a full judicial review as well as suspension of all exploration pending the outcome of the case. In a rare move, the Government is being supported by 15 of the world's largest oil companies. If the judge decides that Britain has a case to answer, the case may proceed to a full hearing which would last months.

It is the first serious test of whether European environmental law applies to offshore oil and gas and the first judicial review that the Blair government has faced on environmental grounds. The case is likely to be adjourned until the autumn. Although Rockall and its territorial waters are also claimed by Denmark, Canada, Ireland, Iceland and even the clan Mackay in Scotland, Greenpeace argues that the unexplored north Atlantic should be left to the sea and the birds, a wilderness area of the same significance as Antarctica - which the world's nations have agreed not to prospect or develop for 50 years.

Today, there are few signs of Rockall's previous occupants. Only five people-including now the Guardian have ever spent a night on the rock. The giant Union flag painted by Tom Maclean, a former SAS man who, with the help of the Navy, spent 41 days on the rock in 1985 to underline Britain's territorial claim, is almost washed away. A light beacon cemented into the summit by a naval expedition in 1971, has been smashed.

Greenpeace's temporary addition to the rock is a hi-tech fibreglass pod, which looks like a double-yolked egg, sleeps three and will be dismantled when the winter storms gather and Rockall is abandoned again to the sea.

The pod, strapped to Hall's Ledge, is powered by solar and wind energy, linked to the Internet and satellite telephones and occupied by Eric and Thomas, from Holland and Denmark.