Staying afloat during a major refurbishment is often a worry for people, but for one partnership in Leith docks, intending to open a restaurant, this was absolutely essential

Most new restaurants have teething problems, but the owners of Cruz, the new floating restaurant on the Water of Leith, had to cope with a mysterious blast under the freshly refurbished boat that registered with scientists at the British Geological Survey.

"Thankfully no damage was caused," says Matthew Tabatabaie who took the helm of the derelict Ocean Mist in 2005 with fellow entrepreneur Sassan Pour, to create Cruz, a destination restaurant and bar.

Mercifully stress-induced headaches subsided when investigators concluded there was nothing more sinister than a freak build-up of natural gases behind the blast. And, looking on the bright side, it means that all evacuation procedures have been tried and tested thoroughly.

You don't usually have to walk the gangplank before dinner unless you are taking a cruise, in which case you have the prospect of motion sickness with your main course. Although diners stay in one place, they do get great views over the docks from the open rooftop terrace - where there'll probably be high demand for seats in the long summer evenings.

For Tabatabaie - who came to Scotland from Iran in the Seventies to study engineering at Napier University - this venture represents the realisation of a long-held dream. He was working in an Italian restaurant in Leith 20 years ago when he first saw the retired steamer, Ocean Mist at Leith Docks. "Even then I knew I wanted to run a restaurant there," he recalls.

Built in Greenock in 1919 as a navy vessel it was first used as a trawler, mine sweeper and then as a pleasure yacht. It was owned for a period by the Guinness family and used to ship racing cars to the continent.

Today's incarnation is not even the boat's first as a public venue.

It was converted to a bar in the Eighties, but had lain in a steadily rusting state for some years before Pour, an architectural engineer, and Tabatabaie (who also owns Italian restaurants De Niro's and Ti Amo in Edinburgh) came on on board, literally.

But there's no need to dig out the deck shoes when you dine out, as the interior of Cruz is as sleekly styled as any contemporary restaurant in the city.

"We balanced the idea of being on a boat with the practicalities of running a restaurant," explains Tabatabaie. To that intent there are nautical features such as porthole windows that look from the bar on to the water, while items that would detract from qualities of light and space, such as the captain's cabin, have been removed. "We didn't want it to feel dark and dingy," confirms Pour.

Work began in April 2005, when the boat interiors were largely gutted. "We took it back to bare metal and repaired the hulls," says Pour; "Then it was like building a new boat inside an old boat."

The bends of the vessel's floors, originally designed for buoyancy, were retained. "The vertical and horizontal curvature of these surfaces allows guests to retain the feeling of being on a boat" explains Tabatabaie.

Beneath the white-walled bar with its curved leather booths and atmospheric lighting, Cruz offers a spacious function/conference room available for private hire (and in which salsa dancing was about to begin when that blast occurred).

"We removed the boilers that were down there," explains Tabatabaie, "although the engine room was cleaned and retained as an interior feature."

The restaurant, above the bar, is an airy space holding up to 90 guests. For the design of the interior, Tabatabaie and Pour called on Edinburgh-based designers Ampersand. Internally, it consciously avoids gimmicky seafaring themes in favour of an enduring, classic look.

"People are pleasantly surprised how light and bright it is," says Pour.

The sheer choice of fixtures and fittings now available posed a challenge to Pour and Tabatabaie, but amongst the options they decided upon are some stylish Italian chairs and durable Amtico flooring. It conceals under-floor heating that negates the need for bulky radiators. "We made sure the boat was well heated and ventilated to make the experience enjoyable," says Tabatabaie. To add atmosphere, LED lights shift the colour and mood.

The roof terrace was finally completed two years after the project began. For Tabatabaie and Pour it's all been worth it to see "passengers" climb on board.

Cruz, 14 The Shore, Leith (0131 553 6699/0131 553 6600 www.the cruz.co.uk)