Debt-ridden Dubai World plans to sell the Queen Elizabeth (QE) 2 cruise liner, owned by its private equity arm Istithmar, to raise funds.

Istithmar bought the QE2 from UK shipping firm Cunard for $100m in 2007, amid plans to convert it into a luxury floating hotel.

The state-owned recession-hit Dubai World has accumulated a debt of $22bn and a $10bn bailout by Abu Dhabi has enabled it to continue making debt payments.