The late Wednesday ruling could open the federal government up to billions of dollars in liability for the damage wrecked when levees meant to protect the low-lying city crumbled under the weight of a massive surge of sea water that raced up a narrow navigational channel.

It was hailed as a vindication for those who had spent years trying to convince the Corps to fix the flawed system and who have insisted that the flooding of nearly 80 percent of New Orleans was in fact a man-made disaster.

"The Corps' lassitude and failure to fulfill its duties resulted in a catastrophic loss of human life and property in unprecedented proportions," Judge Stanwood Duval wrote in his 189-page ruling.

"Furthermore, the Corps not only knew, but admitted by 1988, that the MRGO (Mississippi Gulf-River Outlet) threatened human life... and yet it did not act in time to prevent the catastrophic disaster that ensued with the onslaught of Hurricane Katrina."

Duval also concluded that statutory liability shields did not protect the Corps from responsibility for sections of the levee system that were maintained as "navigational channels."

"The Corps' negligence resulted in the wasting of millions of dollars in flood protection measures and billions of dollars in Congressional outlays to help this region recover from such a catastrophe," Duval wrote.

"Certainly, Congress would never have meant to protect this kind of nonfeasance on the part of the very agency that is tasked with the protection of life and property."

The 720,000 dollars awarded to three homeowners and a business will set the stage for as many as 100,000 more lawsuits, The Times-Picayune reported.

The government is expected to appeal the ruling.

A spokesman for the Army Corps of Engineers declined to comment on the ruling "as the issues involved in the case are still subject to possible further litigation."

Hurricane Katrina made landfall near New Orleans on August 29, 2005 as a category three hurricane and smashed through the poorly-built levees surrounding the city, destroying tens of thousands of homes and killing nearly 1,500 people.

The landmark decision was welcomed by the city's mayor as means to achieve justice for those who have spent years trying to get adequate compensation for everything they lost to Katrina's fury.

"Hopefully this ruling will open up the flood gates, if you will, for those people to receive proper compensation," Mayor C. Ray Nagin said, adding that the city intends to file a lawsuit seeking damages from the Corps.

Lawyers representing the plaintiffs said the decision was an important step on the road to recovery.

"It has been proven in a court of law that the drowning of New Orleans was not a natural disaster, but a preventable man-made travesty," the MRGO Litigation Group said in a statement.

"The government has always had a moral obligation to rebuild New Orleans. This decision makes that obligation a matter of legal responsibility."

The ruling concerned areas of the city damaged by floodwaters from the 75-mile (120-kilometer) long shipping channel dubbed MR-GO that runs along the eastern side of the Big Easy.

Dwan Roberts, 48, is among the scores of homeowners who plan to file suit against the government in the wake of the decision.

"We actually made it through the storm. It was afterwards, when the levees didn't hold, that we got all the water," she told AFP.

Her one-story home, located in suburban Chalmette, Louisiana between the MR-GO and the Mississippi River, flooded up to the ceiling.

"There was nothing left to salvage," she lamented.

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