A medal presented to John Bell as the first merchant captain to sink a German U-boat during the first world war is set to be one of the star lots in Morton & Eden's July 2 auction in London.

German U-boats were a major threat to shipping and, with five Royal Navy cruisers lost during the first ten weeks of the first world war, England's shores were vulnerable

The Distinguished Service Cross was presented to Captain Bell after he successfully rammed and sank the U-boat off the coast of Plymouth, UK.

Having previously sold at auction for £4,140 ($6,381) in 2007, the medal is now estimated to sell for £3,000-5,000.

It is accompanied in the sale by a 19-carat gold watch given to Bell by King George V at Buckingham Palace, where a dinner was held in his honour.

The German U-boat fired a torpedo at Bell's SS Thordis, which was carrying coal from Newcastle to Plymouth, on February 28, 1915.

Thankfully, the captain managed to avoid being hit in a last-minute manoeuvre.

However, instead of fleeing, Bell then turned his 500-ton steam ship and the U-boat and rammed it at full speed.

The crew of SS Thordis were awarded £660, which is more than £75,000 in today's money

"I observed periscope of submarine on starboard bow. I immediately ordered all hands on deck in case of emergency. I then observed submarine pass across our bow and on to our port beam, where it took up a position 30 to 40 yards off," Reads Bell's deposition to Customs.

"Shortly after this I noticed the wake of torpedo on my starboard beam. I then put my helm hard over to starboard and ran over periscope, when I and all the crew heard and felt crash under bottom."

"I did not see submarine after, but saw oil floating on water. I then proceeded on voyage."

Paul Fraser Collectibles has a fantastic selection of militaria for sale, including a signed letter from Sir Winston Churchill.