By Ian Neubauer

Dubai’s state-owned developer Nakheel has denied ongoing rumours it will sink a plan to turn the QE2 into a luxury hotel moored alongside the Palm Jumeirah artificial island in the United Arab Emirites.

“Irrespective of short-term plans, the ultimate goal is to renovate and refurbish QE2 and for her to be the focal point of a luxury precinct dedicated to her,” Nakheel said in a statement.

The company bought the QE2 from Cunard at a scrap price of US$100 million in 2007 — when the global economy was still steaming along.

However, the economic downturn has caused Nakheel to postpone a number of projects, including the construction of Burj Dubai — which aims to be the world’s tallest building.

Nakheel attributed the delay of the QE2’s restoration project to the “time-consuming” process of commissioning and drafting engineering drawings, AP reported.

The company said it had already launched a maintenance project to revamp the ship and it was considering opening it to visitors in Dubai until construction kicked off in earnest.