QE2 to become floating hotel

Dubai is to buy the Queen Elizabeth 2 cruise ship for £50million and turn it into a floating hotel off the Gulf emirate's man-made islands.

The 70,000-tonne vessel, launched by the Queen in 1967, is to be sold to the Dubai World firm by Carnival, the world's largest cruise operator. Dubai government-owned real-estate developer Nakheel is building three palm-frond shaped isles off its coast.

The ship will be berthed from 2009 at a pier at the Palm Jumeirah development. Dubai World, whose investment arm Istithmar has made the purchase, also owns shipping company P&O. Istithmar hopes to recreate the QE2's original interior decor and fittings, and to establish a museum charting the ship's history.