The Royal Yacht: whatever happens, the taxpayer will not foot the bill

Doubts Resurface Over Britannia's Future

It was widely reported over the weekend - following a briefing by a Government department spokesman - that the Royal Yacht would undergo a £50 million refit financed by private investment.

But senior Ministry of Defence sources revealed that DML dockyard in Plymouth made an unsolicited bid to carry out the refit last week.

A junior defence minister, John Spellar, insisted the Government has not made any decision yet. "It's the start of the silly season, with Parliament in recess," he explained. "Here we have one of a whole number of options that are being considered, no decision having been made, and this has suddenly erupted into a major story in the press. It's unfortunate. It doesn't reflect the situation in Government."

The Chancellor, Gordon Brown, and the Defence Secretary, George Robertson, are agreed that nothing will happen unless it is funded by the private sector.

The previous Conservative administration proposed buying a new £60 million yacht funded by the taxpayer. But the new Government has made plain that no public funds will be made available to replace Britannia, due to be decommissioned in December.

MoD sources said preliminary work to establish whether industry would be interested in funding a new yacht or a refit began last week. The next stage will be to ask industry to submit privately funded proposals for a new yacht and for a refit on a lease-back arrangement.

Royal Navy sources are stressing that it appeared to make more financial sense to build a new vessel, which would last 40 years, rather than refit Britannia to extend her life by just 20 years.

Downing Street said the Government was actively examining whether private finance arrangements might be used for the Royal Yacht. "No decisions have been taken. We are looking at the options," a spokesman said. But he made clear that if the Queen or any other member of the Royal Family was using the yacht for official business, there was no question of them being asked to foot the bill.