Dubai has settled on a use for the Queen Elizabeth 2 cruise liner it bought for £64 million, with plans to make it into a floating hotel fitted with the original furnishings.

The 300-room hotel is expected to open within 18 months at the city's Port Rashid.

Sultan Ahmed bin Sulayem, chairman of the company that bought the ship, said they realised visitors wanted to see the QE2 as it originally looked, so they are not planning major changes as part of the conversion.

The ship's fate has been the subject of intense speculation since Dubai bought it in 2007. Original plans to completely overhaul it as a luxury hotel were scrapped when Dubai's economy tumbled into crisis.