Claims against United Utilities, which operates the town's sewage works, could run into millions of pounds after solicitors and a barrister told campaigners they were prepared to go to court on a no-win no-fee basis.
The legal team is to begin compiling a list of people in the town who would be interested in joining the action.
Claims could only be made for six years back, but could be as much as £2,000 per year – £12,000 per household.
The news court action could be on the way comes after months of campaigning by port resident Des Sainsbury who has canvassed local people.
He said: "It seems, eventually, something is happening at last. We seem to be getting somewhere."
Mr Sainsbury added: "The £2,000 is a ballpark figure. It's unlikely to be any more than that.
"It might be a little less, it depends on what a particular judge thinks is fair."
Mr Sainsbury already has hundreds of people interested in making a claim, but the legal team will now canvas people in the town to get more claimants.
He said Welsh solicitors Hugh James, together with a barrister, had agreed to take the case and they also had an expert on odours who was prepared to work on it on the same understanding.
He added: "They are confident on the evidence that is there. They would not go ahead with this unless they thought they were going to win. They would be throwing away tens of thousands in time."
Gwen Evans of Hugh James in Merthyr Tydfil said: "We are advancing matters and we are looking to investigate it on behalf of local residents. Based on evidence we have seen, it is worth investigating further."
The smell, which comes from United Utilities' Jameson Road sewage works, has blighted the port for a decade.
A United Utilities spokesman said: "If residents want to engage with solicitors that is for them. Our door is always open, we're happy to talk directly with any of our customers.
"We're already working with the Environment Agency and Wyre Council to upgrade the existing wastewater network to meet current and future sewage demands.
"We have committed to a £50m capital investment programme over the next two years, established a working public forum with all interested parties, opened a new customer service centre and launched a 24hr free phone number too."
The action is likely to be discussed at a public meeting of Fleetwood Action Group at the Senior Citizens' Hall Warrenhurst Road at 7pm tonight.