A ship has already been sunk in New Zealand

Members of the Artificial Reef Project (ARC) say the sunken ship would be colonised by marine life and would attract divers from across Europe.

It has been laid up at Portsmouth for around six years waiting to be auctioned.

ARC wants to scuttle the ship in Whitsand Bay - where the tanker Kodima ran aground earlier this month, spilling thousands of tonnes of timber.

Nick Murns, one of the promoters of the scheme, said: "The Crown Estates say they want more information about financial security and liability.

Funding shortfall

"They want to be sure it is not going to be a pollution problem and they are not going to be responsible if it washes ashore or if someone dies on it.

"We do not have full funding or backing yet."

The tanker Kodima grounded in Whitsand Bay

He said the block on progress could put the entire scheme - the first of its kind in Europe - in jeopardy.

"People may not give us any money until we know everything has been sorted.

"Our licence says we can do it as long as we have the permission of the owner of the sea bed.

"This is quite crucial. We feel the Scylla is likely to come up for sale very soon.

"No other vessel will fit the bill."

Rusting hulk

Scylla would be particularly appropriate, said Mr Murns, a former Royal Marine.

"She was the last-ever ship built by DML when they were ship-builders in Plymouth, and she was a Devonport-based ship.

"I've looked round her and she is very scrappy. She's falling apart, basically.

"If we don't have the funding to bring her home very soon, that's it."