Most of the work will focus on the Corpach to Banavie swing bridge and involves the installation of a coffer dam, pointing and grouting on the lock walls, general repairs and new bank protection.

The scheme launched by Mr Prescott is part of the �10m invested over the past four years in restoring the 200-year-old canal to its former glory.

The government is contributing �800,000 of the cost of this latest phase, with the other half coming from Historic Scotland.

Yachtsmen use the canal, which is 97km long, as a winter berth as well as a safe scenic passage between Scotland's coasts.

Economic impact

British Waterways Director Scotland Jim Stirling said: "The Caledonian Canal is a key element in the Highland economy, attracting millions of visitors to the Great Glen, supporting more than 700 jobs and generating over �14 million annually for the local area.

"If the canal is to continue to play this key role in Highland life it is vitally important that the refurbishment programme is completed.

A range of canal projects is under way in Scotland, at a total cost of more than �100m.

The �78 million Millennium Link project restoring the Lowland Canals between Edinburgh and Glasgow is the single largest canal regeneration project currently underway in the UK.