(6:00 a.m. EST) -- The QE2 will be turned into a floating luxury hotel in the Far East, the Financial Times reports.

It was hoped that the iconic liner would be brought back to the U.K., but owners, Dubai-based Istithmar, have decided to sell it to a Singapore-based investment group instead.

Recent reports claimed that Istithmar had sold the 70,391-ton, 1,791-passenger ship to the Chinese for £20m to be scrapped.

The report in the Financial Times refers to “people aware of the matter” who state that a joint venture deal will be signed today (January 17). Oceanic, backed by investors in Hong Kong and China, is expected to pay Dubai about $1m a year, with an option to purchase the floating hotel after 10 years for a minimum price of $35m, the “people” say. After a dry dock refurbishment, the ship will sail to Singapore or Hong Kong to start her new life as a floating luxury hotel. The investors have already set up a website -- QE2Hotels.com -- which outlines the plans for the ship, which include 100 'residences' and 300 rooms, against a backdrop of the Hong Kong skyline.

It draws to an end the sorry saga of the Cunard flagship, sold to Dubai World in 2007 for £64 million, with the intention of turning it into a floating luxury hotel in the emirate. The economic crash left the investment group unable to carry out its plans and the ship has been languishing in Port Rashid ever since.

A statement from Cunard -- which hitherto had refused to comment on the plans -- reads:

"Cunard Line is pleased that Dubai are progressing their plans to develop the QE2. We ensured the ship had a very successful last year in 2008 with an appropriate send-off as she left the Cunard fleet, and it is very good news that Dubai are announcing further developments to preserve the ship for the future."

QE2 London -- a subsidiary company of Out of Time Concepts –- was hoping to bring the ship to London, mooring it opposite the O2 Arena and beside the ExCeL Exhibition Centre in London's Docklands. The plan had the backing of both the Mayor of London Boris Johnson and the Chancellor George Osborne.

Rob Lightbody of TheQE2Story.com said: "We have seen many press stories from Dubai over the last four years regarding the future of QE2, which have all proven to be inaccurate. We believe our investors can show Dubai that QE2 London is still the best proposal." --by Adam Coulter, U.K. Editor