A couple's dream of returning a floating restaurant and hotel to the River Dart has ended in financial disaster after it was found to be full of holes.

The former Dutch barge Resnova, which had been a landmark vessel on the Dart for 30 years, was on the market with an asking price of £345,000 when she was bought by Dartmouth couple Julie Smith and Geoffrey Morgan.

But when the 145ft-long barge was taken out of the water to begin a major £250,000 refit in Plymouth, it was discovered she was so rotten she could never be refloated, said Julie.

Now the barge is likely to be dumped on the foreshore shingle at Plymouth where she may one day be converted into boatyard offices, she said.

But whatever happens she will never be coming back to Dartmouth, Julie said.

She refused to reveal how much the duo have lost over the Resnova deal but she said that they were 'definitely not bankrupt'.

She said: 'It is absolutely terrible. We are completely gutted. We have lost a lot. It has certainly been a financial blow.'

But she said they were refusing to give up on their dream of opening a floating restaurant and hotel at Dartmouth by March next year.

They are already looking at possible replacements for the Resnova and Julie added: 'There are several boats that are on the market. We are leaving today to see one in London. We are also travelling to Belgium and Holland to look at other ones over there. It's just a question of finding the right vessel. There are a lot of vessels on the market that could be converted but time is against us.'

Julie and Geoffrey sold their Dartmouth boat hire business and the guesthouse some three years ago to go sailing around France. They returned last year and began negotiating to buy Resnova from owner Peter Clarke who put the boat up for sale last year after closing the floating operation down.

The boat was taken to Galmpton where she as stripped out before being towed to the Mashfords yard at Plymouth for the refit.

Julie said: 'We bought the Resnova only two months ago with great plans to re fit her. The plans were all going well, and we managed to get her towed from the River Dart around to Mashfords boatyard in Plymouth.

'There she was taken up the slipway and water blasted, and then a holding primer put onto her hull.

'We must admit to being horrified when we saw the number of holes that this exposed. Our surveyor was then away for a week, so we weren't able to realise the full extent of our problem until his return from holiday when he did an in-depth examination only to find that the hull was in a terrible state.

'The flat bottom of the boat had been double plated in areas and these plates had shifted, trapping water between them exposing holes.

'In the area below the engine bay, where sludge had been in the bilge, the boat appeared to be rotting from the inside out. In places you could put your hand from underneath into the engine room.

'The topsides of the boat were a mass of holes, with lots of areas of very thin metal. Several of the portlight windows simply blew out during the blasting, as they were so rotten around the edges, and where water had seeped in over the years below the windows, the vertical frames, the very structure of the boat, had rotted away in some places.

'Just to be sure, we asked another surveyor, a Dutch barge specialist, to give us a second opinion, and he confirmed that the hull was shot.

'We have, we think, spoken to practically every boating person in the South West and beyond to see if a solution could be found. Plenty had ideas but none ended up being practical.

'We then had a huge dilemma. The Resnova was blocking the slip at Mashfords, not able to go back into the water, as she would surely sink. We looked at the sad possibility of breaking her up but Mashfords did not have the space for this.

'We have, in the last few hours, sold her for a peppercorn amount to a boatyard in Torpoint, which is only hundreds of yards from Mashfords.

'They will gunk the hull in order to float her over to their yard on a calm day with a high tide and then will neap her onto a shingle beach.

'They tell us they are hoping to build blocks for her to go onto in order to use her as a marina office/shower block, in a year or so.

'This whole operation has cost us very dearly financially and emotionally.

'In the meantime, we would like to thank the many people who offered help and advice to us along the way.'