Ben Wallace confirmed the rising costs – which could be as much as £50 million higher than previously thought – as the Prime Minister said the vessel would allow the UK to “show itself off to the world”.
Labour criticised the “absolutely staggering” cost of the project, calling on the Government to instead “invest wisely” to tackle crime and antisocial behaviour.
The vessel is due to be paid for out of the Ministry of Defence (MoD) budget, even though No 10 has confirmed the ship will be for trade rather than defence purposes.
Speaking at an event in Greenwich, Mr Wallace said: “Subject to working through bids, competition and technology, I aim to commission the ship for between £200 and £250 million on a firm price.”
He said he hoped construction would start in a British shipyard as early as next year with the “ship in the water by 2024 or 2025”.
The Prime Minister was asked about the project by LBC’s Nick Ferrari. He said: “It is a project that will not only help to drive, revive the ship building industry in this country, drive immediate jobs and growth for young people, immediate job opportunities for young people in a sector in which this country used to lead the world.
“But when you consider the opportunity for the UK, as we compete now for inward investment in the UK, we need a forum, a place where the best of British business and industry can come together to showcase what we have to offer, and, you know what I mean by, by MIPIM, the world trade fairs, the expos.
“We need somewhere where the UK can show itself off to the world and attract investment and that will drive jobs and growth in the UK, not just in shipbuilding but across every sector of the UK.”
Labour’s shadow home secretary Nick Thomas-Symonds said the project was the Prime Minister’s “vanity yacht” and said Labour would scrap it.
The boat will be the first national flagship since the royal yacht Britannia which was decommissioned in 1997.
But the new vessel will be a ship rather than a luxury yacht.
It is aimed at boosting the Prime Minister’s post-Brexit vision of the UK as a global trading nation.
The ship will be crewed by the Royal Navy. It is expected to be in service for around 30 years.