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The Ministry of Defence would pay for the initial costs of a proposed trade yacht, No 10 has said despite having previously suggested the department would fully fund the ship.

The yacht, a successor to the Royal Yacht Britannia, would host trade fairs and talks across the world.

Health Secretary Matt Hancock said the vessel would "pay for itself".

But the ex-Conservative Chancellor Ken Clarke has dismissed the project as "silly populist nonsense".

Lord Clarke said the flagship - which could reportedly cost up to £200m - was "a complete waste of time" adding "we have no money" for it.

"It shows there are people in No 10 who just think there's free money and who think that waving a Union Jack and sending yachts and aircraft carriers around the world shows what a great power we are," the senior Conservative said.

However, Mr Hancock told the ����ý it was "a great idea" adding: "The amount of investment that you can get in...by showing the best of Britain in harbours the world over is very, very significant."

Despite being classified as a trade ship rather than a warship, No 10 previously said the yacht would be funded through the Ministry of Defence's budget.

However, briefing journalists on Tuesday, the prime minister's spokesman said the department would be responsible for "the initial costs of taking it through the procurement process".

He said the government hadn't yet set out the source of the full funding but would do so at a later date.

The new ship - which has not yet been named - replaces the Royal Yacht Britannia which was built in the 1950s and decommissioned in 1997.

The Britannia hosted trade events across the world, but also helped evacuate British nationals from Yemen when a civil war broke out in 1986.

It also provided a honeymoon venue for four Royal couples.