Hundreds of elderly British cruise passengers may have to make their own way home from Madeira after their cruise ship was impounded because of a £1.5 million legal dispute involving the boat's owners.

The 460 tourists claim they are being "held to ransom" aboard the MV Van Gogh, which was impounded by the Madeira Maritime Authorities on the orders of a court in the port of Funchal on April 1. The holidaymakers are in the final stages of a round-the-world voyage and were due back in Falmouth, Cornwall, on Saturday, but their plans have been thrown into turmoil.

Abta, the Association of British Travel Agents, says that the passengers, many of them elderly, and encumbered with luggage after spending three months on their round-the-world trip, are not covered under their bonding system.

Unless agreement is reached in the legal dispute between Club Cruise, which owns the boat, and Menzies Corporate Restructuring, the administrators of the failed holiday company Travelscope - who had the boat impounded while they tried to claim back £1.5 million from Club Cruise - the boat will remain stranded in port and the passengers may find themselves forced to pay for their own flights back to the UK.

Shirley Anne Field, an actress who appeared in the film Alfie with Michael Caine, is one of the passengers. She said that they were being well cared for by the ship's staff, but were angry at being caught up in the dispute. "They’ve had three months to sort this out, but they waited until now to ambush us," the 69-year-old told reporters. "They’re just trying to hold everyone on board to ransom."

The tourists were trying to make the best of their enforced stay, Ms Field said. "Nobody’s complaining very much."

Gladys Hobson, 64, and her husband, Wallace, said that when it was announced that the ship had been impounded, passengers thought it was a joke. "We were all shocked. Our first reaction was that it was an April Fools’ joke. Then we realised it was serious," she said.

Mrs Hobson, from Tyneside, said some elderly passengers were concerned they could run out of medication if the dispute stretched on. "The passengers of this ship should not be made to suffer due to a dispute. They shouldn’t be involving passengers," she said. But she added, philosophically: "We’re in a beautiful place. You couldn’t be in a better place to be held ransom."

The passengers boarded the ship on January 4 knowing that Travelscope, the travel company from which they booked it, had gone into receivership just before Christmas.The cruise was able to continue because Club Cruise, the Dutch company that owned the ship, decided to set up its own holiday company called Van Gogh Cruises to run the boat's cruise programme. It recruited a number of former Travelscope staff to run the new company.

Emma Ward, the general manager of Van Gogh Cruises, criticised Menzies Corporate Restructuring, the receivers who are dealing with Travelscope's affairs in administration, for impounding the boat. She said that MCR should have waited for the ship to return to Falmouth and then taken legal action. Asked whose responsiblity it was to bring the passengers home, she said: "That's a difficult one."

The company has encouraged the passengers to sign a petition to Abta, begging the travel industry body to repatriate them. But today Frances Tuke, as spokeswoman for Abta, assured Times Online that the passengers were not covered by Abta. Travelscope's bonding to Abta expired when it went into receivership, and when Van Gogh Cruises applied to Abta for bonding it was turned down.

"No, Abta isn't responsible for them at the moment," said Ms Tuke. "The situation is that this is a commercial dispute between a cruise liner and a third party, and we can't get involved in this kind of situation."

Insurance experts suggest it was unlikely that the tourists would have any claim for repatriation under their holiday insurance, because they had boarded the boat knowing that the travel company had gone into receivership. Peter Staddon, the head of technical services at the British Insurance Brokers' Association, said: "The fact that they did have the opportunity to walk away and have the cost of their holiday refunded, but chose instead to take the risk of going ahead with their holiday, probably means that they do have the liability. Looking at what has gone before, I can't see that they have a claim on their insurance." The passengers could ask the British Embassy in Madeira for assistance getting home, but would then be presented with a bill for their return travel, he added.

Paul Clark, one of the joint administrators of Travelscope at Menzies Corporate Restructuring, said in a statement that MCR regretted "the inconvenience" to the passengers. "We are hopeful that the owners of the vessel will assist us with resolving this issue to avoid any further delay to the cruise," the statement said.

A spokeswoman for MCR refused to comment on allegations that it had chosen to detain the boat in Madeira with the elderly passengers on board in order to exert the maximum leverage over Club Cruise.

The liner set off from Falmouth for a trip costing up to £9,000 per person for the 460 passengers. It took in the Mediterranean, Egypt, the Caribbean, Ecuador, Tahiti, New Zealand, Sydney, Mauritius and Cape Town. About 30 of the passengers had already been on board the boat for three months, and have now been at sea for half a year.

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