The 169,000-tonne bulk carrier Derbyshire went down in a typhoon in the South China Sea off Japan in 1980 with the loss of all 42 British crew and two of their wives.

Findings of a government-backed expedition to the wreck prompted the announcement last March that a new inquiry into the tragedy would be held.

Deputy Prime Minister John Prescott said then that interested parties should submit representations on whether the formal investigation should be reopened in whole or in part.

Now he has said the formal investigation should be reopened in full.

Controversy has surrounded previous attempts to find out what caused the vessel to sink.

Structural defects were suspected after Derbyshire's sister ship, Kowloon Bridge, ran aground

It was only after a sister ship, the Kowloon Bridge, went aground and broke up off Ireland in 1986 that the first public inquiry into the Derbyshire accident started in 1987.

The first inquiry blamed bad weather. But relatives, unions and shipping experts have always maintained that the Derbyshire and other bulk carriers had design faults.

A union-backed expedition to the wreck led to two government expeditions which concluded that structural faults did not cause the ship to founder.

But a survey scientist said the ship had been "ill-prepared to take on the rigours of typhoon seas".

Mr Prescott said: "The loss of the Derbyshire has been a matter of controversy since she sank.

"I trust that the reopened formal investigation will be able to address all the outstanding questions and close the chapter on the loss of the vessel with the tragic deaths of all those on board."

Before the announcement, 19 MPs tabled a Commons motion urging action on the Derbyshire and pointing out that 350 similarly-designed ships has since been lost, causing 1,634 deaths.

Mr Prescott said: "We will, of course, continue to press for improvements to the standards of the world's fleet of bulk carriers to reduce the number of losses of such vessels."

Mr Prescott said the preparations for the hearing and the presentation of the case were matters for the Attorney General.