Richard Prebble, Minister of Transport when the Mikhail Lermontov sank in the Marlborough Sounds in 1986, still gets phone calls from "conspiracy theorists".

When the Russian luxury liner went down that night, it left rumours and innuendo swirling in its wake, talk of sealed evidence under lock and key.

But Mr Prebble says it is "completely untrue" that the New Zealand Government suppressed evidence.

"This has to be one of the most clear-cut cases ever," he says.

"The pilot, Captain Don Jamison, never disputed that he made the decision to take that route and it was wrong and that was why the ship sank ...

"But why he decided to guide the ship over a passage that he actually knew was too shallow, I don't think he'll ever be able to answer."

Captain Jamison told the inquiry he had been working 80 hours a week for the four months before the accident and was mentally and physically exhausted.

The Mikhail Lermontov's last voyage was billed as "The Two-Week Cruise of a Lifetime" - but it nearly ended in the loss of hundreds of lives.

Under the command of Captain Vladislav Vorobyvev, the ship left Sydney on February 6, 1986.

After visiting Auckland, Tauranga, Wellington and Picton, the ship, with 734 people on board, left Waitohi Wharf on the afternoon of Saturday, February 15, heading for Milford Sound.

Captain Jamison, the Marlborough Harbour Board harbourmaster, pilot and acting general manager, joined the ship to guide her out of the Marlborough Sounds.

For some unexplained reason, Captain Jamison directed the helmsman to steer between Cape Jackson and the lighthouse, barely 460m from shore.

Passengers reported hearing a thud around 5.37pm.

That was the pinnacle rocks gouging a 12-metre gash in the hull.

Water flooded in, short-circuiting the electrical systems and killing the engines.

The ship started to list badly but no alarm sounded. There was a public announcement to say that dinner would be an hour late.

However some passengers suspected something was amiss when crew members appeared wearing lifejackets.

Captain Vorobyvev dashed to the bridge and ordered the ship to beach. Maritime officials say his decision to put passenger safety before the ship saved hundreds of lives.

A mayday call was issued.

Havelock fisherman Michael Harris was one of the first on the scene.

He had been anchored about halfway along Cape Jackson with another fishing boat when he saw the huge liner squeezing through the gap.

"I turned on the radio and they were already sending out distress calls," he remembers.

The two fishing boats immediately followed the stricken ship as it headed for the shore.

Mr Harris grabbed his camera and his photos are the only record of the Mikhail Lermontov's final hours.

He was very impressed with the actions of the liner's crew.

"They handled it really well, I thought, did a terrific job, with a lot of help from locals."

Only one person was killed: a 33-year-old Russian engineer.

About 20 fishing boats and recreational vessels came streaming out of Picton to help with the rescue.

The Arahura, which had been en route to Picton, diverted to the scene and arrived at 9.30pm.

The Navy vessel Taupo also searched throughout the night for those lost in the water, and survivors adrift on liferafts.

Everyone worked through the pitch-black night in driving rain.

The rescue efforts were complicated by the fact there was a 25 knot southerly, which blew the ship back offshore toward Gannet Point near Port Gore, 56km from Picton.

Finally, at 10.15pm, the Mikhail Lermontov hit the seabed with its bow, and the boat rolled on to the port side.

Witnesses described the deafening roar as the ship went down, crashing, banging and hissing.

A preliminary marine inquiry by the New Zealand Government, which was released on March 6, 1986, blamed Captain Jamison for the accident, praised the Russian crew for their efforts in saving all the passengers, and declared the lifesaving equipment on board the ship was adequate.

Insurance claims were believed to total around $100 million.

The harbour board reached an out-of-court settlement with the owners.

The Soviet Union conducted its own inquiry, as was its right under international maritime law.

A man with a striking resemblance to Russian President Vladimir Putin was present at the inquiry in Australia, and can be seen in newspaper photos accompanying Captain Vorobyvev to court.

Mr Harris was flown to Sydney by the port company - but he was never called to give evidence, which he says "surprised" him.

His only contribution was to show his photos to the lawyers and tell them what time each was taken.

Twenty years later, he says he is not interested in getting into "the whys and wherefores" of the sinking.

"It all gets a bit controversial, many people have got a lot of views and have written a lot of things on it.

"All I know is what I saw."

Captain Vorobyvev was given a four-year jail sentence by his Government, but that was suspended.

Mr Prebble says his personal opinion was that it was "very hard on the captain, who wasn't even on the bridge at the time".

There was never any doubt that it was the New Zealand pilot that was at fault, he said.

"The only reason he wasn't charged was because there were no charges we could charge him with," he says.

An "oversight" in New Zealand law at the time meant that New Zealand-registered pilots working on foreign ships could not be prosecuted.

In fact, it was only in 2003 that the law was changed to correct this anomaly.

"The ministry did write to him, suggesting very strongly that he surrender his pilot's licence, which he did.

"I understand that he reapplied for it later, and was reissued with it."

Mr Prebble said he wrote to the Russians to offer to hold an inquiry, but was told in no uncertain terms that it was not necessary.

"They were very clear that it was their ship, they were going to hold the inquiry and they would send us the results of the inquiry, which they did." Captain Jamison has never spoken publicly of the sinking and worked for Strait Shipping for 10 years before his retirement in 2001.

Meanwhile, the 155m Mikhail Lermontov lies almost perfectly intact in about 50m of water, and has become one of Marlborough's most popular diving attractions.