Liverpool is the race's "spiritual home", said its organiser

The city will be the starting and finishing port in the 2005 to 2006 and 2007 to 2008 events, at a cost of �1.8m.

The agreement between Liverpool City Council and Clipper Ventures is the largest ever negotiated for the event.

The city council said the 2002/3 race - which it hosted - generated more than �10m worth of positive publicity in the UK.

It said the next two races would generate a much bigger international profile for the city.

We are keen to establish Liverpool as the home of the Clipper race William Ward, Chief Executive of Clipper Ventures

The race organiser said the city's facilities and public support for the race were major factors in its winning bid.

More than 80,000 people flocked to view the finish of the 35,000 miles and 11 months long race in September 2003.

City Council Leader, Councillor Mike Storey, said: "The 2002/3 Clipper race was extremely popular.

"I am delighted to see the race playing a major part in our celebrations up to 2008 as the city flies the flag for the UK around the world.

''The River Mersey is fundamental to the success of the new Liverpool.

'Spiritual home'

"The growth of the River Festival, World Heritage status for the waterfront in 2004, a new Cruise Liner Terminal in 2005 and now the Clipper Race, will re-establish its world famous reputation.''

William Ward, Chief Executive of Clipper Ventures, said: "We are keen to establish Liverpool as the home of the Clipper race, enabling us to extend a partnership that has already been highly effective over the last four years."

Sir Robin Knox-Johnston, race organiser and first man to sail solo non-stop around the world, said: "We are attracted to the facilities of Liverpool and the city's enthusiasm to host the event.

''Liverpool has proven hosting capabilities and its people illustrated their great support for this race when crowds in excess of 80,000 flocked to view the spectacular finish of Clipper 2002 from both sides of the mighty Mersey River last month.