Downing Street has been approached with proposals for a new privately funded royal yacht to mark the Queen's diamond jubilee this year, Prime Minister David Cameron's official spokesman said today.

Mr Cameron has ruled out using taxpayers' money to fund a yacht, saying that it would not be "appropriate" in the current economic circumstances.

But his spokesman said the PM would be likely to "react favourably" to requests for Government support for an initiative to raise private money to pay for a vessel to commemorate the Queen's 60 years on the throne.

Mr Cameron is understood to have received letters in September last year from universities minister David Willetts and Education Secretary Michael Gove backing a proposal from retired rear-admiral David Bawtree.

The PM's spokesman told reporters: "The proposal has come forward from a number of sources to build a new royal yacht. Clearly they are talking about using private money, whether that is from organisations or institutions or companies or individuals."

Asked if Mr Cameron would be willing to offer non-financial assistance to any such project, the spokesman said: "We would react favourably to that, but it is not a Government proposal.

"If people come to us and say could we do anything to facilitate this and support this, then we would be happy to have those conversations and see what we can do, but it is not a Government proposal.

"The question is what it is that we can do as a Government to support this. If there's something we can do to support it, we will look at that."

Proposals for a new yacht to replace Britannia, which was decommissioned in 1997, hit the headlines today thanks to a leaked letter sent by Mr Gove to Cabinet colleagues.

In it, Mr Gove suggested that a yacht - likely to cost in the region of £60 million - could be "a gift from the nation to Her Majesty".

Mr Cameron and Deputy Prime Minister Nick Clegg moved swiftly to rule out any use of public money to pay for the vessel.

The Prime Minister's official spokesman said that Mr Cameron believed it would not be "appropriate" to spend taxpayers' cash on a new yacht at a time of economic austerity.

And Mr Clegg said a royal yacht would not be at the top of voters' list of "priorities for the use of scarce public resources", joking that it was a case of "the haves and the have-yachts".

Labour said Mr Gove was "out of touch" to think such expenditure was appropriate at a time when school budgets were being cut.

But the Education Secretary told MPs he was not suggesting using taxpayers' money to fund the project.

"The letter which I wrote to the Prime Minister on September 12 clearly stated that I agree of course the project for a royal yacht, the Future Ship Project for the 21st Century, was one - and I was quite clear in my letter - where no public funding should be provided," said Mr Gove during education questions in the House of Commons.

He told Labour critics of the proposals: "You should have been careful to look at the charts and navigate out of rocky waters."

The ship would offer Britain's "disadvantaged youth" the chance "to learn new skills and to take part in exciting new adventures", he said.

Rear Admiral Bawtree is the chairman of the Future Ship Project 21st Century Charitable Trust, which is seeking support for the construction of a national flagship - a sailing vessel which would have a commercial, educational and scientific role as well as providing a floating residence for the sovereign on trips overseas.

In his letter, Mr Gove said that the Queen's "highly significant contribution" to Britain and the Commonwealth should be recognised with a "lasting legacy".

"In spite, and perhaps because of, the austere times, the celebration should go beyond those of previous jubilees and mark the greater achievement that the diamond anniversary represents," wrote the Education Secretary.

"Events such as proms and the party at the palace organised for the Diamond Jubilee, and street parties, although excellent, are transient. It would be appropriate to do something that will mark the significance of this occasion with fitting ceremony.

"My suggestion would be a gift from the nation to Her Majesty; thinking about David Willetts's excellent suggestion of a royal yacht, and something tangible to commemorate this momentous occasion."

Mr Gove also argued that the Diamond Jubilee celebrations should not be secondary to the Olympics.

"The Diamond Jubilee must not be overshadowed by the Olympic Games, but form an integral part of this great year for our country," he wrote.

Labour Party deputy chairman Tom Watson said: "We're all looking forward to the Diamond Jubilee. The significance of the occasion should be celebrated across the country.

"But Michael Gove has shown he is out of touch with this proposal.

"When school budgets are being slashed, parents will be wondering how Gove came even to suggest this idea. This is not the time to spend £60 million on a yacht."

Mr Clegg declined to comment on the leaked letter, but added: "Most people in the country would think the Diamond Jubilee is a wonderful occasion for us to celebrate together as a community and as a nation.

"But I suspect that most people in the country would think, given that there is very little money around, that this probably would not be the top of their list of priorities for the use of scarce public resources."

Mr Cameron's spokesman said: "Clearly there is a difficult economic situation, there are scarce resources, and therefore we don't think it would be an appropriate use of public money at the present time.

"I don't think anyone is suggesting that there should be public money made available for this.

He added: "The question of whether or not there should be a royal yacht is a question for the Palace, not the Government."