Royal Yacht Britannia may get reprieve

The Royal Yacht Britannia sailed out of Cowes yesterday officially for the last time, amid signals from Whitehall that it could be rescued by John Major. Ministerial sources said the Cabinet will have to reach a decision on replacing it next month, but the Prime Minister favours extending its life until a new yacht is built.

The vessel's future has involved intense negotiations between three key Whitehall departments, since the Ministry of Defence announced it was to be decommissioned because of its age. The MoD said it needed a pounds 17m refit, but supporters of Britannia say that estimate is inflated. Ian Lang, President of the Board of Trade, is "enthusiastic" about replacing it with a modern royal yacht which would be used to boost exports abroad. The Secretary of State for Defence, Michael Portillo, would support it, providing it did not fall on his budget. Michael Heseltine, the Deputy Prime Minister, could decide the issue; his friends say he was won round by the yacht's success in helping the export drive when it was moored in Cape Town, South Africa.