Deep sea divers believe they have discovered the remains of the British warship HMS Sussex which sank off the coast of Spain 300 years ago.

The ship was believed to be carrying treasure worth more than £500 million when it sank during a fierce storm near Gibraltar in 1694.

Odyssey, a US based underwater salvage company, spent two years on the project and searched an area covering 200 miles before it made the discovery.

HMS Sussex was the flagship of a fleet ordered to deliver a hoard of coins to the Duke of Savoy as part of Britain's attempts to forge an alliance against France.

The Sussex, laden with 80 cannons and weighing more than 1,200 tons, was battered during the storm leaving no time to save the men, let alone the treasure. All but two of its 550 crew drowned.

Odyssey hopes the coins will still be found on board the ship which lies at a depth of more than 3,000ft.

However the salvage company faces a fight if it wishes to claim the treasure.

A spokesman for the Ministry of Defence said: "Anything on board remains crown property. If there is gold, it is crown gold."