The multi-million pound restoration of the Medway Queen paddle steamer can finally begin after a contractor was chosen to build a new hull.

Earlier this year, a £1.8 million grant was secured from the Heritage Lottery Fund to undertake work on the historic craft. The money was provided under the condition only traditional techniques would be used.

The veteran vessel, heroine of the Dunkirk evacuation in 1940, was berthed at Damhead Creek, Hoo, before being cut into pieces as a prelude to the restoration project.

Work can now begin after Bristol’s Albion Dockyard was granted a contract to build the hull using old-fashioned plate-riveting skills. It is one of the most significant developments in the 20-year restoration of the steamer and will allow the Medway Queen to take to the water once again.

Brian Goodhew, from the Medway Queen Preservation Society, was overjoyed with the news.

He said: “This is a major step forward and the culmination of 20 years of hard work. We can finally get under way with building the new hull, which is brilliant news.

“Members of the preservation society in the past have made this possible, and through their determination they have saved the Medway Queen.

“This will be the start of a new chapter in her history.”

David Abels, proprietor of the Albion Dockyard, will be overseeing the project. He said: “We are going to use original techniques and skills to build the hull exactly as it would have looked.

“First we’ll be examining the original drawings which are from a bygone era and will need some alteration, then we will start making new bulkheads before laying out the keel.

“It’s going to look just like an old-fashioned shipyard with riveters working away.

“We could see it completed by late 2009, when she can either stay here for further work or be floated to Medway.”

The Medway Queen’s new hull will be the first fully riveted ship to be built in an English shipyard for 50 years.

Once the hull has been completed the remaining existing parts of the steamer, including the engines, decking, bridge and funnel, will be added to complete the project. While in Bristol, the Medway Queen will be in esteemed company.

The neighbouring dock is home to the SS Great Britain, Isambard Kingdom Brunel’s Victorian vessel.

For those unable to visit Bristol there are hopes a webcam will be installed for enthusiasts to watch developments online.