A CRUISE liner once part of a historic attempt to create peace between North and South Korea is to be a familiar sight on Southampton Water.

Fred Olsen Cruise Lines has announced an agreement to purchase the 837-cabin cruise ship Grand Latino from Spain's Grand Latino de Navegacion.

The ship is sister to the Fred Olsen Lines' successful Black Watch, which is a regular visitor to Southampton and generates hundreds of thousands of pounds in quayside services.

Grand Latino will join the existing fleet of three vessels, operating world-wide itineraries focused on the British market out of Southampton and Dover.

But she had a previous life as one of four liners devoted to the unique and now abandoned cruise run between South and North Korea.

The 28,388-ton ship was called Hyundai Kumgang and serviced the purpose-built Kumgang tourist resort, which was set up by car and electronics giant Hyundai at a cost of £635m in a bid to bring the warring countries closer.

To pay off the enormous investment, Hyundai anticipated attracting 500,000 visitors a year from the south, each paying about £1,000 for the cruise across the border because there are no land routes.

The forecasts proved to be calamitously misjudged. Even during the first two years - when enthusiasm for the project was strong - only 370,000 people made the journey, and numbers swiftly fell below 50,000, prompting Hyundai to cut three of the four ships on the route in response to mounting debts.

Built in Finland in 1973 and originally named Royal Viking Sky, Grand Latino is a 205.47-metre long diesel-powered vessel.

Fred Olsen have yet to reveal the new name, which is likely to follow company tradition and begin with a B and have a Scottish influence.

Following delivery in October 2005, the ship will undergo an extensive refurbishment prior to entering service in early 2006.

Fred Olsen Cruise Lines' chairman, Fred Olsen Jnr, said: "This decision reaffirms our commitment to the very buoyant British cruising market.

"A fourth ship, very much in keeping with our unique product style, will allow us to operate an even wider choice of itineraries and home ports for both repeat customers and newcomers to cruising."

Southampton is already the cruise capital of the UK, with 230 visits scheduled this year, and 700,000 passengers anticipated.

The port, which supports up to 12,000 direct and indirect jobs, is worth an annual £1.6 billion to the regional economy.