P&O Princess Cruises
                Diamond Princess - update

                     10 October 2002


As  previously reported, the Diamond Princess,  which  is
currently   under   construction  in   Mitsubishi   Heavy
Industries'  Nagasaki  shipyard, suffered  a  major  fire
earlier this month.

Mitsubishi Heavy Industries and P&O Princess Cruises have
now had discussions following a preliminary assessment of
the  damage.  Both  parties confirm  that  they  wish  to
continue  with  the construction of the Diamond  Princess
although  there  will  be  a  significant  delay  to  the
scheduled delivery date.

Princess   Cruises   will   today   be   announcing   the
cancellation  of  the  cruise  program  of  the   Diamond
Princess  for  the period to February 28 2004.   It  will
take  the  yard several weeks to complete the examination
of  the  ship  and to determine the full  extent  of  the
damage and agree a final delivery date.

P&O  Princess  reconfirms that the company has  in  place
contractual  arrangements with  the  yard  and  insurance
policies  that it believes will be sufficient  to  ensure
that there will be no significant economic impact on  the
Group nor any adverse impact on its 2003 earnings.

                        - Ends -


Contact:
P&O Princess Cruises plc
Caroline Keppel-Palmer                    +44 20 7805 1214
                                           +44 7730 732015

Brunswick
Sophie Fitton                             +44 20 7404 5959


Website                          www.poprincesscruises.com

P&O Princess
P&O Princess Cruises plc is a leading international cruise
company  with some of the strongest cruising brand  names:
Princess  Cruises  in  North America;  P&O  Cruises,  Swan
Hellenic  and Ocean Village in the UK; AIDA and A'ROSA  in
Germany;  and P&O Cruises in Australia.  It is  a  leading
provider of cruises to Alaska, the Caribbean, Europe,  the
Panama  Canal and other Exotic destinations.  The  current
complement of 19 ships and two river boats offering 31,130
berths  is set to grow in the next two years with six  new
ocean cruise ships and two river boats on order.

P&O  Princess  Cruises has approximately 20,000  employees
worldwide and carried over one million passengers in 2001,
generating   a  revenue  of  approximately  $2.5   billion
(approximately GBP1.7 billion). Headquartered  in  London,
P&O  Princess Cruises' ordinary shares are quoted  on  the
London  Stock Exchange and as ADSs on the New  York  Stock
Exchange (under the symbol "POC").