George Robertson, Secretary of State for Defence, will today announce that two competing bids are being considered for the royal yacht to be placed on permanent public exhibition.
There was strong speculation around Whitehall that one of the two sites could be the port at Leith, near Edinburgh, where a strong bid has been put forward by Forth Ports Plc, as part of a pounds 30m development plan to house the Scottish Parliament.
The Scottish Office is based at the docks in Leith, and would be linked to the Parliament complex, if Leith beats a rival bid for the Parliament to be based in the centre of Edinburgh at Calton Hill.
One advantage of the Leith bid is that the work would be completed by the millennium without the need for lottery money, and Britannia could be moored alongside a planned terminal for visiting cruise liners.
Ministers are believed to have turned down a rival Scottish bid for the royal yacht to be moored in a dry dock in Glasgow, close to the Govan shipyards where it was built more than 40 years ago.
Portsmouth is believed to be other favourite site, and one which would enable Britannia to become part of an impressive array of historic ships, which includes Nelson's flagship, the Victory.
Other bids included Greenwich, south London, near the National Maritime Museum and within easy reach of the site of the Millennium Dome; Canary Wharf, also in Docklands, east London; and the Manchester ship canal.
Ministers have been keen to avoid being accused of favouring the Millennium site with too many attractions, and Peter Mandelson, the minister responsible for the project, has insisted that it was not part of his strategy.
However, basing Britannia in Scotland is not without potential embarrassment - Mr Robertson and John Reid, the defence minister, have neighbouring seats in Hamilton in Scotland.Reuse content