Dubai said it has paid Cunard Line US$100 million (HK$780 million) for the liner, the latest move in its ambition to become a global tourism hotspot ranking alongside Las Vegas.

"Dubai is a maritime nation and we understand the rich heritage of QE2," said Dubai World chairman Sultan Ahmed bin Sulayem. "She is coming to a home where she will be cherished."

The QE2 has crossed the Atlantic more than 800 times in its 40-year lifetime and carried more than 2.5 million passengers. But it will sail no more once it is berthed at a huge multi-million- dollar palm-shaped artificial island and turned into a luxury hotel from 2009, according to the plans unveiled by Istithmar, the investment arm of state- owned Dubai World development company.

ADVERTISEMENT

The Palm Jumeirah, which is 1 times the size of New York's Central Park and can be seen from space, will eventually include thousands of luxury apartments and villas as well a hotel part-owned by billionaire Donald Trump.

The 293-meter ship weighs around 70,000 tonnes and has a combined guest and crew capacity of 2,794.

Dubai's latest purchase is another step in the city-state's sprint to become a major tourist and leisure destination.

The ship, which was launched by Britain's Queen Elizabeth II herself in September 1967, is the longest-serving cruise liner in Cunard's 168-year history and was its longest-serving flagship. Since it went into service in 1969, the ship has undertaken 25 world cruises.

Istithmar said its refurbishment program would aim to recreate the ship's original interior and would also include a museum.

Dubai has undertaken several other mega-projects in order to more than double the number of its tourists to 15 million by 2015.

Work on Dubailand, a cluster of billion-dollar schemes billed as the "world's most ambitious tourism, leisure and entertainment project," is well under way.

Scheduled for completion around 2025, Dubailand is estimated to cost 235 billion dirhams (HK$500.2 billion). It will also house the world's largest transparent snow dome and a Universal Studio theme park.

Equally ambitious is Burj Dubai, or Dubai Tower, which is expected to be the world's tallest skyscraper. Started in early 2004, the construction of the US$1 billion tower by South Korea's Samsung should be completed at the end of 2008. AGENCE FRANCE-PRESSE