King Juan Carlos' gesture of frugality earlier this year when he renounced his yacht has backfired after a court ruled that the crew were owed €1.2m (£1m) in payment for illegal dismissal.

The money will come from the Patrimonio Nacional, Spain's equivalent of the civil list. In short, the taxpayer will foot the bill.

The 41.6-metre (137ft) yacht, called Fortuna, was moored in Mallorca and cost €21m. It was a gift from a consortium of businessmen in the Balearic islands, each of whom contributed €600,000.

Now that the king has renounced the yacht, they plan to recoup some of their outlay by selling the vessel.

Fortuna was used mainly for photo opportunities of the king relaxing on board with his family and visiting dignitaries; Prince Charles and Diana, Princess of Wales, were guests in 1990.

During court proceedings brought by the crew, who claim wrongful dismissal, it emerged that the captain had a salary of €138,000, almost double that of the prime minister. That's good money, given that in the whole of 2012 he took the boat out only once, on a trip to the top of the island to ensure the engines were still running.

The captain will receive a payout of €133,789 while seven crew members, whose average salary was €60,000, are in line to get over €100,000 each.

The captain of a Spanish merchant marine vessel could expect to earn €70,000, while an ordinary seaman is paid around €1,500 a month.

The king renounced the yacht, which costs €20,000 to refuel, as part of a floundering PR campaign to improve the royal family's battered image.

The formerly popular king fell from grace when he was photographed in hunting gear beside an elephant he had shot on an expensive hunting trip in Botswana.

His son-in-law is currently engulfed in a scandal over the embezzlement of millions in public funds, a scandal that threatens to taint Princess Cristina, the king's youngest daughter.