Merchant seamen's organisations demonstrated in support of a naval gunner's daughters who are fighting to turn their father's final resting place into a war grave.

Sisters Rosemary Fogg and Valerie Ledgard, both from Worthing, are fighting a High Court battle to protect the war-time wreck where their father's remains lie.

Lawyers for the sisters accused the Government of unlawfully failing to honour the memory of their father and the shipmates who died with him because the ship was an armed merchant-man and not a Royal Navy vessel.

The Merchant Navy veterans hope that yesterday's case will lead to a landmark ruling which will protect the graves of thousands of other sailors who died during Second World War.

They carried Red Ensigns, the flag of the British merchant fleet, and banners saying: "White Ensign (Royal Navy) dedicated - Red Ensign forgotten."

Petty Officer James Varndell, 44, a Royal Navy gunner, died with 20 others on the SS Storaa when the vessel was torpedoed in November 1943.

Rosemary Fogg was 12 and her sister, Valerie Ledgard, just four, when the vessel went down in the Channel ten miles south of Hastings and now fear that divers are at liberty to disturb his remains.

Yesterday their barrister, Eleanor Sharpston, told a High Court judge sitting in London of the sisters' anguish at the fact that their father could not rest in peace.

Ms Sharpston read a statement from Mrs Ledgard in which she said: "In addition to the obvious trauma and loss of our father, I, my sister and surviving members of my father's colleagues are being asked to shoulder the heavy burden of knowing our father's remains are not at peace."

Mrs Ledgard said she was "gravely upset at the thought of individuals disturbing or removing the remains of my father and other members of the crew" because they were not protected by law.

Many crew of the SS Storaa, which was carrying steel to a weapons factory in Cardiff when it was sunk, were Danish.

The grandchild of one wrote to the court pleading for the wreck site to be respected as a war grave.

The Ministry of Defence say the vessel and the grave of PO Varndell cannot be protected under the 1986 Protection of Military Remains Act because he died on board a Merchant Navy ship not "on military service".

In 1985 the MoD sold the salvage rights to divers from Hastings Sub Aqua Association for £150.

Mrs Fogg and Mrs Ledgard contend that it was wrong to conclude that the ship, which was armed, sailing in convoy and had already beaten off one E-boat attack before it was hit, did not qualify for consideration under the definition of "military service".

Yesterday's challenge was to the Defence Secretary's decision in October last year not to designate the SS Storaa for protection under the Protection of Military Remains Act.

Before the hearing began Captain John Sail, national chairman of the Merchant Navy Association, said there were more than 32,000 merchant seamen "who have no graves but the sea".

He said many were now being "dishonoured" because the wrecks on which they died had not been given Government protection but been sold for salvage and were being used for leisure diving.

The hearing continues today.