The company has made a bid to buy the 44-year-old yacht, which is to be decommissioned on 11 December, and spend pounds 30m establishing the music- based training school with recording and live entertainment facilities.
The school, which would offer scholarships, unique training facilities and state-of-the-art recording equipment, would sail round the world each year as Britain's floating "Ambassador for Music".
According to the nightclub's proposal, funding would come from a "consortium of music and entertainment sources who, at this stage, wish to remain anonymous" and an "appropriate state lottery application".
The Ministry of Sound, which is owned by the 34-year-old multi-millionaire James Palumbo, currently runs a successful nightclub in London's Elephant and Castle, a record label and clothing line, and launches a new youth and dance music magazine, Ministry, next month.
In a letter to the Secretary of State for Defence, George Robertson, last week, Mark Rodol, chief executive of the Ministry of Sound, reminded the Government of the Prime Minister's opening speech to the Commonwealth Conference.
"[Tony Blair] once again endorsed the music industry and its contribution to Britain alongside the importance of this country's current wave of creative youth culture. It is our intention to provide facilities which would fuel even further an industry that currently provides our economy with over pounds 2bn each year." Mr Blair has made it clear that he wants to see Britannia, the Royal Family's last yacht, preserved for future generations and Downing Street has shortlisted six proposals for the future of the Queen's floating palace.
They include a conference centre near Tower Bridge on the Thames, a heritage centre at Canary Wharf, a museum at Greenwich, or a business and heritage centre at Portsmouth or Leith in Edinburgh.
Clydebank council, meanwhile, wants to bring the ship, originally built on Clydeside in 1953, back home where it would become a permanent tribute to the efforts and skills of Scottish ship-workers.
A Ministry of Defence spokesman said last night that the music school proposal was "inappropriate".
But Ministry of Sound sources say executives at the company have privately been given "every encouragement" by senior Labour figures for the plan.
The nightclub has close links with the Labour Party, built up during the general election through Use Your Vote, a campaign to encourage young people to the ballot box. Mr Palumbo is known to be close to Peter Mandelson, the Minister without Portfolio.
In July 1994, Mr Mandelson caused uproar in the Commons when he said that he had discussed with the Queen the building of a retirement berth for the Britannia in his constituency of Hartlepool.
Mr Rodol said the Ministry of Sound intended to establish the training school regardless of whether the bid to buy the Britannia was successful.
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