THE race is on to build the world’s first underwater hotel. Two companies are hoping to start work within weeks on their projects — an £80m development in the South Pacific, and an even more lavish £330m scheme in the Persian Gulf.

Bruce Jones of American-based Poseidon Resorts, who claims inspiration from the marine biologist Jacques Cousteau, and Joachim Hauser of Hydropolis in Dubai, who took his lead from the author Jules Verne, have been battling for years to get their visions off the drawing board.

Both men are now close. The designers of Poseidon hope to have it finished by Christmas 2007, with its Gulf rival likely to be completed soon after. Guests are already making reservations at rates of up to £3,500 a night.

Poseidon, next to a coral reef 60ft below the surface off a tropical island near Fiji, will have 20 suites and two VIP complexes, a restaurant and a bar in a series of interconnecting pods. Guests will be able to enter by submarine or through a tunnel linked to a beachside foyer.

“The island will provide the most amazing setting in a totally natural underwater environment,” said its designer, Paul Moorhouse, owner of Marlin Submarines in Plymouth. “We feel very strongly about the ecological and environmental impact of the complex, which is why it will be placed on a sandy bottom, not on the reef itself, and we will make the entire resort as clean as possible.”

A scale model may be built and tested in the waters off Devon. The structure itself will be assembled in either Seattle or New Zealand, and floated to the location by ship.

Hydropolis will be built on a grander scale in a man-made lagoon off Dubai. It will include a concert auditorium and a “beach” with artificial clouds for guests staying in its 200 rooms and 30 suites.

Mansoor Ijaz, chief executive of Crescent Hydropolis Resorts, said it would be one of the world’s most luxurious hotels. Security will include an anti-missile radar system.

Both hotels will be made with steel. Sections of reinforced acrylic plastic will be used for the windows, which will be translucent by day and can be electronically clouded at night for privacy.

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