The 'Battle of Sept Iles' was a naval action fought between British and German forces off the Sept Iles near the French coast in the English Channel between one light cruiser and six destroyers of the Royal Navy hoping to intercept a German blockade runner, and a German torpedo boat flotilla and minesweepers of the Kriegsmarine (22/23 October 1943).

In fact, it is possible that the British vessels were caught in an ambush, and the action ended with the sinking of the light cruiser Charybdis and the scuttling of the escort destroyer Limbourne after she had suffered severe damage. The battle was the last surface fleet action of the war in which the Royal Navy was defeated, and the last German surface fleet action victory.

By the middle of 1943, the advantage in the 'Battle of the Atlantic' had swung to the Allies, and the Royal Navy went on the offensive. In August 1943, Admiral Sir Ralph Leatham’s Plymouth Command was ordered to develop an operation for the regular harassment of German shipping, with a secondary aim of drawing German naval forces into a fight in order to destroy as many German warships as possible before the 'Overlord' invasion of France.

Leatham thus developed 'Tunnel' (ii) which, in basic terms, comprised a series of offensive sweeps along the coast of western France, starting on the night of 5/6 September. Three more such sweeps followed without incident. Then of the night of 3/4 October, the 'Hunt' escort destroyers Limbourne, Tanatside and Wensleydale, plus the fleet destroyers Grenville and Ulster, exchanged fire with the 'Elbing' type torpedo boats T-22, T-23, T-25 and T-27, Grenville and Ulster suffering light structural damage. Four more 'Tunnel' (ii) operations were undertaken between 13 and 18 October, but in each of these the British tactics were always the same, and thus very predictable.

On 22 October, the British gained intelligence about the movement of the 6,408-ton German blockade runner Münsterland, which had departed Brest with an important cargo of latex and strategic metals. In all probability, this intelligence was bait to lure British warships into a position in which they could be ambushed. At a pre-start briefing, Lieutenant Commander Roger Hill, commander of Grenville, voiced his reservations to senior staff about the predictability of the tactics and the lack of training between the vessels, going so far as to urge a cancellation, but his advice was not heeded.

The light cruiser Charybdis was assigned to the operation for the first time, with her commanding officer, Captain George Voelcker, in overall command, and on 22 October the British force put to sea from Plymouth. With Charybdis were the fleet destroyers Grenville and Rocket, and the 'Hunt' class escort destroyers Limbourne, Wensleydale, Talybont and Stevenstone.

Six German minesweepers of Korvettenkapitän von Blanc’s 2^nd Minensuchsflottille and two radar-equipped patrol boats escorted Münsterland in a well-rehearsed procedure. The blockade runner was then joined by five 'Typ 39' torpedo boats of Korvettenkapitän Franz Kohlauf’s 4^th Torpedobootsflottille.

Soon after 00.00, the British force conducted a radar sweep at 13 kt while about 8.1 miles (13 km) to the west of Brittany. Meanwhile, at the same time German radar operators detected the British ships and carefully tracked them and relayed the information to the German ships. These warnings were intercepted by the 'Hunt' class escort destroyers and by Plymouth Command, but for some reason Charybdis did not.

Münsterland therefore turned back out of harm’s way while the torpedo boats lay in wait for the British force. Charybdis detected the torpedo boats on her own radar at a range of 14,000 yards (12800 m) at 01.30 and signalled the destroyers to increase speed. Only the rearmost destroyer, Wensleydale, picked up the signal, and as she overtook the rest of the force she caused confusion, compounded by the arrival of the first German torpedoes and friendly star shells illuminated the leading British ships rather than those of the Germans. By now the British formation had lost cohesion.

The British force was visible against the lighter horizon and the Germans were further aided by a rain squall approaching from the south-west. Visibility was poor under low cloud, and there was a long heavy swell. Kohlauf saw the silhouette of the British cruiser, and believing he had been surprised gave the immediate order to turn and flee but not before ordering every ship to launch its torpedoes. Charybdis could have inflicted considerable damage with her eight 4.5-in (114.3-mm) guns, but the Germans had been confirmed only on radar and no visual contact had been established. A total of 24 torpedoes was launched by the German ships, and British look-outs suddenly saw the tracks of torpedoes, and before anything could be done Charybdis was hit on the port side by a torpedo from Kapitänleutnant Friedrich-Karl Paul’s T-23, flooding No. 2 dynamo room and B boiler room. The light cruiser’s port electrical ring main failed and the ship listed 20° to port and came to a stop. Other torpedoes narrowly missed Wensleydale and Grenville, and then another torpedo, this time from Korvettenkapitän Verlohr’s T-27, struck Charybdis. This time the torpedo impacted the aft engine room, which flooded, cut all electrical power and increased the list to 50°.

Within minutes of the second torpedo hit on Charybdis, Kapitänleutnant Blöse’s T-22 scored a hit on Limbourne, exploding the escort destroyer’s forward magazine. The ship listed heavily to starboard with her bows blown off, and her crew subsequently abandoned ship. Charybdis sank within 30 minutes with the loss of more than 400 of her men including her captain. The other destroyers had near misses from collisions in the confusion and then withdrew, ending the battle.

The British force, now under command of Hill of Grenville, came back only after it had been learned that Limbourne had been crippled, and then undertook a rescue operation. Some 107 of Charybdis's crew were recovered through the morning and day. The severely damaged Limbourne had lost 42 members of her crew, and after an attempt to take Limbourne in tow had failed, the order was given for her to be scuttled, and she was sunk by torpedoes from Talybont and gun fire from Rocket; 100 survivors were recovered.

The action was the last defeat of the Royal Navy in a surface action of the war with Germany. Lessons were learned by the British and, despite the setback, 'Tunnel' (ii) succeeded inasmuch as only four out of 15 blockade runners reached France. Münsterland returned to port in St Malo unscathed, but her blockade running mission had been aborted. On the eventual attempt to move her, she was forced ashore and destroyed to the west of Cap Blanc Nez by fire from British coastal artillery at Dover, on 21 January 1944.