The Royal Navy warship HMS Nottingham, which ran into rocks off Australia's east coast earlier this year, is to be repaired at a cost of �26m, the Ministry of Defence has announced.

The type-42 destroyer hit rocks and holed her hull at Lord Howe Island in July and is still being transported back to UK waters.

The repair of HMS Nottingham and the retention of her potent warfighting capability is good news for the Royal Navy

Lord Bach, Defence procurement minister

A skeleton crew of 14 engineers, mechanics and workers from the Nottingham are travelling with the Dutch crew aboard the MV Swan, which is carrying the destroyer.

Defence Procurement Minister Lord Bach said the warship would be repaired at Portsmouth naval base and the work could take up to 18 months.

The warship's future had been in doubt after the accident, which nearly sank her and caused extensive damage.

Extensive refit

A Ministry of Defence spokesman said: "The future of HMS Nottingham has been subject to a full investment appraisal which considered a range of options.

"Since HMS Nottingham underwent an extensive refit programme in 1999, which extended her operational life to 2012, the most cost effective solution was established to be a full repair."

The vessel is set to reach Southampton by the weekend, before being towed by tug to Portsmouth.

Lord Bach said: "The repair of HMS Nottingham and the retention of her potent warfighting capability is good news for the Royal Navy."

Taxpayer costs

The destroyer HMS Glasgow has been "reactivated" to cover for Nottingham while the repairs take place.

HMS Nottingham is a batch two destroyer built in 1978.

In 1999 she was refitted at a cost of �55m.

A full Board of Inquiry into the circumstances of the running aground at Lord Howe Island, 200 miles off the coast of Australia, has yet to report its findings.

A 160ft gash was torn in her hull by a submerged but well-charted rock in the Tasman Sea on 7 July.

A total of 253 crew were on a routine trip from Cairns, in Queensland, to Wellington, in New Zealand.

An initial Royal Navy inquiry found there had been lapses in procedure on the bridge of the Nottingham.