RESTORATION work on Donald Campbell’s Bluebird has halted in the latest development in the ongoing saga.

The world watched in horror back in 1967 when Campbell was killed while attempting to set a new water speed world record on Coniston.

Locals 'successfully misdirected' opportunistic amateur divers who attempted to find and retrieve Bluebird’s wreckage, who did so without the approval or knowledge of Campbell’s family, but in 2001 his final resting place was located by engineer Bill Smith from Newcastle.

The wreckage, which the Campbell family gifted to Coniston’s Ruskin Museum in 2006, was handed over to Mr Smith on the understanding that, once restored, it would be returned to Coniston.

However, despite the completion of an £800,000 purpose-built extension to house the boat in 2010 as well as successful runs on Bute, Coniston is still to see the boat’s return.

A bitter dispute has meant Bluebird remains on Tyneside with the museum urging Mr Smith to return it.

Earlier this month the family of the Coniston speed legend spoke out in an attempt to solve the saga and urged the man behind the Bluebird’s restoration to return the boat to its rightful owners.

The museum is also taking legal action to ensure the boat is brought back to Coniston.

Now Mr Smith has ‘downed tools’ in what can only be seen as a veiled call for some 'give and take' from the museum.

“It is with regret that due to circumstances beyond our control the Bluebird Project has been left with no option but to cease all operations on the restoration of Bluebird K7 for the foreseeable future,” he said.

“This is due to contractual and other matters that we fully believed to be adequately covered but which now appear to require further work.

“We remain as committed as ever to displaying Bluebird K7 in Coniston and operating her on Coniston Water for public benefit as well as at other locations but to achieve this goal, set by ourselves back in 2002, much effort is still required by many people.”

A source close to the museum said Mr Smith was 'doing little more than throwing his dummy out of the pram'.

"He believes he has some sort of divine right to the boat and obviously with the impending legal action he is throwing his dummy out of the pram," they said.

"It's little more than the petulant behaviour of a child refusing to give a toy back which doesn't belong to him.

"Now he must obey the wishes of Donald's family and give back Bluebird to the Ruskin Museum, its lawful owner."