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A tug containing 200 tonnes of diesel will be moved to port following a salvage operation to save it from sinking.
Engineers and salvage experts have been on board the Christos 22 preparing it to be moved for full repairs to be carried out.
The tug was hit by the decommissioned naval training ship Emsstrom off Hope's Nose in Torbay, Devon, last night.
The Coastguard and Maritime Agency said there was a "very low" risk of pollution, with the diesel contained within the tanks of the vessel.
There had been fears that if the Christos 22 sank, it could leak fuel on to nearby beaches.
The Emsstrom was listing heavily for hours following the incident and sunk at around 1pm on Monday 14th January.
The coastguard said the vessel was a bare hull and not a pollution risk.
Eight people have been rescued off the coast of Devon from a tug which is carrying 200 tonnes of diesel.
The tug, which was travelling from Germany to Turkey, was damaged by a vessel it was towing as it tried to anchor a mile off Hope's Nose in Torbay around 7pm last night.
A salvage operation to prevent the boat from sinking and leaking the fuel onto the nearby tourist beaches has begun with the help of two naval ships.
Christos 22 had pulled into the coastline in order to check a problem with the tow when it was hit and began taking on water rapidly.
The Moto Vessel Emsstrom, the decommissioned vessel being towed by the tug became separated but has now been secured.
Torbay Life Boat and Exmouth Life Boat were the first to respond to a May Day call, rescuing six of the eight crew who were unhurt.
The master in chief of the tug and the engineer later boarded two Royal Navy ships which have begun a salvage operation to stop the boat from sinking.
The watch manager at Brixham Coastguard praised the efforts of HMS Severn and HMS Lancaster, whose quick response is likely to save the boat he added.
The operation is ongoing with the support of two tugs, one form Brixham and one form Portland, who are pumping water off the stricken boat.