BBC West of England Correspondent Clinton Rogers: The submarine is under lock and key

The unmanned submarine was discovered bobbing in the sea off the coast of Cornwall by the crew of a fishing boat.

The Navy wants the submarine returned. But the fisherman, who now has salvage rights, is refusing to hand it over until he receives a salvage payment.

Leach: claiming salvage

The submarine is being kept under lock and key at a secret location in Cornwall by boat owner John Leach.

He and the crew of his boat Britannia discovered the yellow submarine all alone in the English Channel.

They brought it back to Mevagissey harbour and are keeping it under wraps.

He said: "We've said we'll release it once they've come up with a sensible salvage offer."

The Royal Navy has yet to make him any offer although they have admitted the situation is embarrassing.

Britannia crew discovered the submarine

The submarine is worth around £1m. It was lost from HMS Cromer and is used for underwater survey work.

Marine lawyer Charles Hattersley said: "For a vessel worth around £1m and bearing in mind there was a high degree of danger and a certain amount of skill and expertise involved, it could be as much as £200,000 or as little as £50,000."

The row is being carefully followed by Cornish locals but until the navy make Mr Leach a substantial offer the yellow submarine will remain hidden away.