A man has been found guilty of selling one of two stolen propellers belonging to the royal yacht Britannia.

The two massive spare propellers were discovered missing from a warehouse in Leith Docks after a fire last May.

Kenneth Halliday, 50, was caught selling a large lump of brass that had previously been one of the propellers. He was given £5000 for the three-tonne brass hub of the propeller by a scrap dealer and split it with the thieves.

He was arrested after the Britannia Trust reported the propellers, worth £7000 each, missing. Halliday was identified after he gave scrap dealers William Waugh his name during the sale.

Halliday denied breaking and entry and theft, but last Wednesday at Edinburgh Sheriff Court he was found guilty of handling stolen goods. He was cleared of theft and of breaking into the Britannia Trust outbuilding.

Sheriff Kenneth Maciver said Halliday must have known or at least suspected that the seven-foot-long propeller was stolen.

Halliday claimed the sale of the propeller happened in mid-May and security guards did not notice it missing until June, during inspections following the fire.

The second propeller is still missing. No further arrests have been made.

During Halliday's trial the court heard how two men had approached him and offered him £1500 for a couple of hours' work before taking him to a building in Leith and showing him the propeller. It had been stripped of its blades but still weighed more than two and a half tonnes.

Halliday had a flat-bed lorry with a winch, and the other men said they had no way of moving the propeller.After hoisting it on to his lorry, Halliday took the brass to the scrap dealers. After one of the thieves took £3500, Halliday said, he split his £1500 cut with the other.

Sheriff Maciver said Halliday must have known something was wrong. He said: "It was admitted by Kenneth Halliday that he was in possession of a huge lump of metal, which I am satisfied was the remains of one of these propellers.

"I'm entirely satisfied that there is guilty knowledge to add to his possession of the stolen goods and Kenneth Halliday was entirely aware when he saw this item it was likely to be stolen."

Sheriff Maciver deferred sentence on Halliday, of Dalkeith, Midlothian, until next month, and granted bail.