When it was announced that the yacht was to be decommissioned, the Ministry of Defence invited proposals for what could be done with it. Nine tenders were submitted and the Government has now announced its shortlist of two.

On the final voyage

The Defence Secretary, George Robertson, announced that the proposals from Edinburgh and Manchester stood out from all the rest. He said they had funding in place and firm costed plans for the appropriate preservation and care of Britannia.

Mr Robertson said that the final decision would focus in particular on arrangements to ensure that Britannia's use and appearance were properly safeguarded.

"After 44 years of distinguished service to Queen and country, Britannia has a special place in the people's affections," said Mr Robertson. "This was confirmed by the many thousands who turned out to see her around the country on her final tour and by the interest shown in her preservation."

Referring to a plea from the Princess Royal for Britannia to be scuttled if it could not be maintained in its current glory, he said it would be wrong to scrap the royal yacht if there were acceptable ways to preserve her "for the wider benefit of the public."

The Edinburgh proposal

The Forth Ports Authority wants Britannia be the "jewel in the crown" of Edinburgh's �50m waterside development at Leith, where it would be moored alongside the plush cruise liner terminal and be open to the public for exhibition and conferences.

Other features of the development include a hotel, shops and a range of leisure facilities. The location has also been earmarked as one of four possible sites for the Scottish parliament. Clearing work has already begun, detailed planning permission is expected next year, with the development completed in spring 2000.

The authority stresses that under its plans, no public money would be spent on bringing the ship to Edinburgh.

Manchester Ship Canal

The Manchester Ship Canal Company plans to berth Britannia in a special dock alongside a visitor centre celebrating the history of the 44-year-old vessel and looking at ports visited and the special events she was involved in, such as the Hong Kong handover.

The location would be close to the Trafford Centre, a �600m shopping and leisure complex due to open next year and owned by the canal company's parent firm, Peel Holdings.

Surrounding the centre would be a heritage complex where photographs, displays and artefacts tracing the history of the canal and industry in North West England will be on display.

A specialist shipping management company, Bibby Line of Liverpool, would take charge of the day-to-day running of Britannia, with the aim of keeping the yacht as close to possible to how it looked when used by the Royal Family.

The plans envisage visitor numbers reaching 400,000 a year after it opens in December 1999 with an entrance fee of around �5 per head.

The failed submissions