The Karina Olsen fishing boat, which sunk earlier this month after posing an increased risk to safety at Penzance harbour, will be removed at a cost to taxpayers of £76,000.

Cornwall Council has paid salvaging company Sam Gilpin Demolition Ltd to dispose of the former trawler, which has been docked at the harbour for over 20 years.

There was concern among swimmers and other harbour-users in Penzance after the 17-metre Karina Olsen sank at the beginning of October, releasing diesel into the harbour. It is understood that the Danish-built vessel was bought in April and sold again in September, shortly before it took on water and sunk.

A spokesperson for the local authority said: “Cornwall Council can confirm an Environment Agency-approved contractor has been contracted to dispose of the vessel.”

The Karina Olsen, which can sleep up to 15 people, was originally a North Sea fishing vessel and was then used for dive charters and survey work. She became a live-aboard boat while moored in Penzance.

Earlier this year the boat was put under the powers of Penzance harbour and advertised on Findafishingboat.com. The website stated: “To the successful applicant we request a £10,000 bond which will give the new owner two months to carry out remedial work to the vessel in order to make her ready for sea. Once departed Penzance the bond will be repaid minus quay dues.”

A meeting of Cornwall Harbours Board heard in January that the Karina Olsen was sold by its original owner with a condition that it was removed from the harbour within three months as it was taking up valuable berth space. However, the boat was resold without agreement with the Penzance harbourmaster and the owner at the time of the meeting was not communicating with the authorities.

The harbours board heard that the Karina Olsen was in a deteriorating condition with no sign of maintenance and posed an increased risk to safety.

After it sank, Andrew Penney, a member of Mounts Bay Marine Group (MBMG) and a swimmer, told us: “I regularly swim in Penzance harbour when conditions in the open sea are not suitable. Recently a boat in poor condition has been moored against the quay. It has since sunk – at high tide it is largely submerged.

“I understand that the boat had a quantity of fuel on board. I believe that some fuel has been pumped off but there is still a thin film of oil on the surface of the harbour at high tide. This has made it impossible to swim. I do not know what impact the oil would have on the environment and sea life.”

He added: “A lightweight boom has been placed around the boat, however at low tide it doesn’t look effective, with it lying flat on the surface and gaps at the edge. I am concerned that the boat has been left to deteriorate and leak fuel for weeks. There has been very little activity to remove the boat.

“I am concerned about the impact to the environment and harbour users if the boat is not made safe as soon as possible.”

A Penzance resident also contacted us, saying: “It has been leaking since it was put there and the boom isn’t containing it either. It’s coming over the top and out of the sides … it stinks. Looking at it at low tide, the boom is useless because it doesn’t form a seal at the bottom, there were large gaps where any oil would escape. There’s a film of oil over the whole harbour.”

LDRS contacted Cornwall Council at the time of the incident. A representative of the council said that when the Karina Olsen sank it “was surrounded by an oil boom and absorbent equipment used to recover a minor spillage at that time. The Harbour Authority were later able to recover large quantity of diesel from the vessel but due to the deteriorating condition of the vessel it has not been safe to recover any more.

“The high spring tide has washed through the vessel and some oil has escaped from the boom. Additional absorbents have been placed around the vessel. We continue to monitor the situation and encourage the vessels owner to take appropriate action to remove the vessel.”