The owner of the container ship that blocked the Suez Canal for six days earlier this year has reached an agreement with Egyptian authorities that will lead to the release of the vessel.

The UK P&I Club, a mutual insurer involved in the negotiations, said on Wednesday that “an agreement in principle” had been struck between the Suez Canal Authority (SCA) and the Ever Given’s Japanese owner on a compensation deal. The value of the settlement has not been disclosed.

“We are now working with the SCA to finalise a signed settlement agreement as soon as possible,” said Faz Peermohamed, director of Stann Marine, a law firm that represents the owners and insurers of the 400m-long ship.

“Once the formalities have been dealt with, arrangements for the release of the vessel will be made,” he added.

The 220,000-tonne vessel became stuck in the global trade artery for six days at the end of March, disrupting global shipping networks for months.

Egypt has held the vessel in the Great Bitter Lake, a body of water in the middle of the canal, for almost three months since salvagers freed the mammoth ship.

The authorities initially demanded payment as high as $916m to compensate for losses in transit fees incurred due to the closure and salvage costs, as well as damage to the infrastructure and its reputation.

The ship’s owner, Shoei Kisen Kaisha, and its insurers offered $150m at first, while the SCA had gradually reduced its demands to $550m.

The two parties became embroiled in a blame game over the grounding of the ship. The insurers faulted the pilots and escort services provided by the SCA, while the Egyptians sought to pin responsibility on the ship’s captain.

About 12 per cent of global trade passes through the Suez Canal with a daily flow of goods worth $10bn worth transiting the waterway, according to Lloyd’s List. At the time of the incident, Refinitiv, the data provider, estimated that lost transit fees totalled less than $100m.

The settlement will bring relief to the owner and to some of those with goods on board, who had been told by maritime service providers to assume that their cargo would not be retrievable any time soon and to reorder any products they require.

Osama Rabie, head of the SCA, announced plans in May to widen and deepen the section of the canal that the ship ran aground in.