This work examines the effect that mid 19th century steamship development had on long distance trade and communications between Britain and Australia. It takes a holistic approach, drawing together a number of diverse but related themes and using much previously unseen material to challenge many former assumptions. The role of steamships is revealed as engines of imperial ambition with the British Government operating a perfidious double-edged policy; publicly espousing 'free trade' but in practice stifling it with subsidies to favoured steamship companies. This practice was designed to obtain a 'navy on the cheap' but created such disruption to communication with the emerging colonies that the tension erupted in the political press of the day. In addition this study reveals the triumphs and disasters of running a steamship company, namely the Liverpool & Australian Navigation Co who operated Brunel's SS Great Britain, without government subsidies. Steamship companies were crucial to the creation of an import/export market on which the developing colony of Australia was to depend for its growth into a successful modern economy and liberal, democratic society.