After the horrors of the Great War, an uneasy peace prevailed. Britannia ruled the waves - but for how long? The mid 1930's saw Germany rebuilding her fleets, defying the Versailles Treaty as Hitler planned to encircle Britain with his Kriegsmarine. Within hours of war's declaration, a U-boat had claimed its first victim in an underwater reign of terror that struck merchantmen and warship alike. By April 1940, Germany had sunk one million tons of Allied shipping. The entrance of Mussolini's Italy shifted the balance of power in the Mediterranean. However the course of Naval warfare was changed in 1941 when torpedo bombers from HMS Illustrious decimated the Italian fleet at anchor in Taranto, crippling three of their battleships in the first Allied victory since the fall Of France. Japan soon learned the lesson - to America's cost. The surprise attack on Pearl Harbour on 7th December 1941 dwarfed Taranto, With 19 Warships and 190 aircraft lost and 22,500 dead. Sea power proved crucial in the Pacific. The battle of the Coral Sea was decisive in denying Japan a gateway to Australia and was a naval first - opposing forces, launching air attacks 120 miles apart, were never in sight of each other. After the US strike On Midway, there was no doubting the tide had turned. Leyte Gulf Was the last and greatest sea battle of World War II, leaving the Imperial Fleet all but destroyed. The era of the battleship had long gone: the aircraft carrier was now the undisputed master of naval warfare.