Repairs and dry-docking work on the Manxman are now expected to cost around £5m, with the Steam Packet confirming the bill will be paid directly by the company from its own reserves.

The state-owned ferry operator has also confirmed the flagship is still expected to return to service towards the end of November, after specialist work on its propulsion shafts, liners and bearings was completed in Denmark.

However, the company has now clarified that figure was the threshold at which shareholder consent was required, rather than a final estimate of the cost.

It said the current estimate for the total cost of the dry docking and repair works is in the region of £5m.

The company said there would be no recourse to Government funding to meet the cost.

The latest update comes after wear was discovered on the Manxman's propulsion shafts and associated components during a routine dry docking in July.

The shafts, liners and bearings were subsequently removed from the vessel and transported to MarineShaft A/S in Denmark, a specialist engineering firm carrying out the repairs.

The Steam Packet said work on those components has now been completed and they are due to return to Cammell Laird's shipyard in Birkenhead shortly.

The next stage will involve the complex reassembly and recommissioning of the components and the vessel.

Manxman is then expected to undergo sea trials before its targeted return to service from the end of November.

The company said further details about the reassembly and recommissioning process would be provided in its next update, including plans for moving the vessel from its current berth to the dry dock.

Managing director Brian Thomson said the company was conscious of its position as a publicly owned business and as a ‘vital link’ in the island's infrastructure.

‘Prudent financial planning is a cornerstone of how we manage the business, operating within our means at all times,’ he said.

‘Therefore, we always ensure there are contingency funds to cover unforeseen eventualities such as this.’

Mr Thomson also confirmed that the company has commissioned an independent report into the causes of the wear.

He said the Steam Packet would seek to recover costs through insurance and warranty ‘where appropriate’.

Brian Thomson, managing director of the Isle of Man Steam Packet Company

The latest announcement follows concerns raised by Ministers earlier this year about the Manxman's reliability and long-term suitability for operations in the Irish Sea.

Documents released under Freedom of Information showed that the Steam Packet board had been concerned that some of the degradation to the vessel's shaft bearing and liner may have been caused by sediment in Douglas Harbour.

The company had said this reinforced the need to complete a capital dredging project to ensure the harbour met minimum depth requirements.

However, the precise cause of the wear has not yet been established and the new independent report is expected to examine the issue.

The FoI documents also revealed that Ministers had raised broader questions about the £78m vessel's long-term suitability, including its reliability, operational resilience in adverse weather and fitness for the company's service requirements.

The Steam Packet's chairman Dan Clague subsequently said Manxman remained a ‘modern and strategically important asset to the company’.