Cunard's longest-serving ship, the QE2, has been sold for €75m and will become a floating hotel and museum in Dubai.

The state-owned private equity firm Istithmar will anchor the luxury liner to the Palm Jumeirah, the smallest of three islands shaped as palm fronds off Dubai's coast.

The QE2 will arrive in Dubai in 2009 and feature shopping and entertainment as well as accommodation.

There are plans to restore the QE2's original interior decor and fittings.

Launched by Britain's Queen Elizabeth II 40 years ago, the QE2 came into service in 1969 and has crossed the Atlantic more than 800 times - with more than 2.5m passengers.

'Dubai is a maritime nation and we understand the rich heritage of QE2', said Sultan Ahmed bin Sulayem, chairman of Istithmar's parent operation, Dubai World.

The purchase is designed to further Dubai's thriving tourist industry. Nearly 6.5m people visited Dubai last year, more than any Arab destination besides Egypt.

However, groups like Human Rights Watch says that development comes at the expense of an exploited labour force (read the HRW report here).