Fred. Olsen Cruise Lines is to base its 839-passenger ship, Boudicca, in Portsmouth.

It will operate five cruises from autumn next year to the Adriatic and the Mediterranean – and there is the possibility of more if all goes well.

Experts predict it will bring about £50,000-worth of business to the city, with people stopping over for shops and nightlife.

Nigel Linguard, marketing director of Fred. Olsen Cruise Lines, said: 'If other companies see us doing well here they may follow and I know the port wants to see more cruises.

'We like to use local ports to help reduce journey times for our passengers and we're pleased with what we saw in Portsmouth. It's a well-located port and closer to the open sea than Southampton so that reduces journey times. Our rivals may decide to compete with us and start running cruises as well.'

Martin Putman, Portsmouth port manager, said: 'Developing our cruise offering is a key focus for Portsmouth Port, and we are looking forward to welcoming Fred. Olsen. It is an exciting development for the port and the city.'

The announcement has been welcomed by Portsmouth and South East Hampshire Chamber of Commerce and Industry.

Chief executive Maureen Frost said: 'It's positive news for Portsmouth, especially from a name such as Fred. Olsen. It's good to see the port diversifying from just ferries and freight.

'It's good news for the city as not only people who come down for the cruises may stay overnight but also families and friends often bring them and may stay.'

The first two cruises are a 21-night Adriatic cruise and a 13-night Mediterranean cruise in October next year.

Boudicca is an 839-passenger ship with 437 cabins and was refitted in 2006 with an historical British theme. She has a speed of 20 knots and a 320-strong crew.

On board is a card room, casino, playroom, craft room, internet room, launderette, library, lido deck, medical centre, observatory, sun deck and swimming pool.