SOUTHAMPTON is celebrating the announcement that the city is to be home for a new multi-million pound luxury liner.

Both the docks and the civic centre have warmly welcomed Cunard's commitment to build another cruise ship which will arrive in Southampton in Jan 2005.

The £300m vessel to be built in Italy is in addition to the already trailed 150,000 ton mega liner Queen Mary 2 which begins construction next month.

Weighing in at 85,000 tons the vessel, at present codenamed 'New Cunarder' will fly the red ensign and be registered in Southampton.

Shipping line Cunard has signed a letter of intent with the Fincantieri yard for the ship, which will be used on traditional cruising routes in and out of Southampton.

Cunard's decision to bring the latest addition to the fleet to the city is a major boost to the port's international reputation as the national centre of the UK's cruising industry.

It also signals the company's aim to fight for a bigger share of Britain's domestic cruise market where it will go head-to-head with P&O Cruises, also based in Southampton which is bringing an additional ship, Oceania, to its fleet next year.

Andrew Kent, Southampton's port director said: "This news come at the end of another busy cruise year in Southampton and will bring further prosperity for the port, the city and the region. The new ship is a symbol of the long partnership between Associated British Ports and Cunard, with Southampton as the cruise capital of the UK.''

The Civic Centre also greeted the Cunard announcement with enthusiasm.

Leader of Southampton City Council, Councillor June Bridle said: "Cunard's latest announcement will really give the people of Southampton something to celebrate as Christmas approaches.

"With Queen Mary 2, which will revive memories of the golden age of the great liners, and P&O's splendid new addition Oceania, also destined to make this its home, the city's role as the UK number one cruise destination is undeniable.

"It is hard to quantify the precise value of the cruise industry to the city but its contribution to the local economy is enormous. We look forward to welcoming her when she arrives in 2005.''