The Royal Yacht Britannia replacement is to cost up to £250 million, as Boris Johnson insisted it will pay for itself “many, many times over”.

In a pre-recorded speech shown at the official launch of the UK’s national flagship, the Prime Minister said he wished to “metaphorically smash a bottle on your hull”, as he praised the initiative.

Mr Johnson said on Wednesday it marked the “beginning of a journey that I believe will cover its costs many many times over”. Earlier this month the Government announced that the new flagship would cost £150 million.

A formal "invitation to tender" document for "design phase one" from the Ministry of Defence, the first stage on getting the ship built, said: “The flagship will be contracted under a firm price contract, the total available budget being £150 million."

However, speaking after the Prime Minister, Ben Wallace, the Defence Secretary, told those gathered at the industry event in Greenwich: “Subject to working through bids, competition and technology, I aim to commission the ship for between £200 and £250 million on a firm price.”

The Telegraph understands that £150 million remains the “target figure for industry”, but this is “part of a cost bracket”. The higher figures are understood to ensure “there is no overspend”.  

Mr Johnson added: “We need a way of showcasing the very best of Britain, the best of our business and manufacturing and our agriculture and service industries. At every big trade fair and expo around the world we need a new aquatic forum, a conference centre, a marketing suite, a place that the world’s top investors will fall over themselves to visit. A  new flagship for a new type of commercial diplomacy.” 

He said building the ship, which is aimed to be at sea promoting British business by September 2025, will support British “jobs and growth”, while making use of “clean, green and digital technologies”. 

“We want our new national flagship to be a revival of national shipbuilding in the UK,” he said.

The Telegraph has been campaigning since 2016 for a replacement for HMY Britannia, which was decommissioned by Tony Blair’s Labour government in 1997 after Conservative prime minister John Major failed to order a replacement in time.

Mr Wallace set out that the competition will run until the end of October, with the hope of announcing the winners in December and begin construction in “a British shipyard as early as next year”. 

He said: “I want the grandparents of the future to boast to their grandchildren and say one day ‘I helped built that ship’."

Mr Wallace also said that not only will the project be a “national endeavour”, but that “if we do it right, it will pay for itself over and over again”.