Bahrain will become the first Middle East country to stage a Formula One event following the signing of an historic deal in Italy last month.

The Gulf state fought off competition from a host of other countries to land one of the world's top sporting events from 2004.

The signing of the deal at the Italian Grand Prix marked the end of two years of intense preparations and is expected to give a major boost to the country's tourism industry.

A study is already under way on how to prepare the country for an anticipated explosion in overseas visitors.

Plans are being discussed which could even see cruise ships moored off the coast of Bahrain to accommodate spectators during the event.

Organisers say up to 70,000 motor racing fans could flood into Bahrain to see it stage one of the world's most prestigious sports occasions.

"We are well aware that there will be a large influx," said Bahrain Racing Circuit acting chief executive Peter Hansen.

"We anticipate a lot of people and 60,000 to 70,000 visitors would be a realistic expectation for the first year.

"It is important to cater for that in terms of infrastructure requirements. We are aware of that and all the logistical issues will need to be addressed.

"This is as much a part of the planning stage as the circuit itself."

Formula One organisers are co-operating with the Works Ministry to come up with a strategy for coping with the huge influx of visitors.

Hansen said a study has already been commissioned by the circuit to evaluate Bahrain's current tourism infrastructure.

This study is expected to take a few months to complete, but it will take into account current hotel capacity and hotel construction programmes currently under way.

However, Hansen revealed that additional hotels will have to be built to accommodate spectators.

He also said cruise ships anchored in waters around Bahrain would be ideal as temporary floating hotels.

Meanwhile, General Organisation for Youth and Sports president Shaikh Fawaz bin Mohammed Al Khalifa who signed the deal, described it as a "truly momentous day for our country".

"We were awarded one of the most prestigious and popular international sports events in the world against stiff competition from the many other countries who have expressed their interest as potential hosts," he said.

The event will be staged at Bahrain's new racing circuit due to be completed in March 2004 in Sakhir