Atlantis had 70,000 tons of Battleship allocation left. This could be split into 4 x 17500, 3 x 23,300, 2 x 35,000 ton ships. All sorts of designs were produced for each of the categories, but the Admiralty was adamant it wanted better ships than the previous Dionysus class. In storage Atlantis still had the four triple 16" left from the Athena class conversions. It was impossible to get a balanced design with nine 16" on the 35,000 ton limit. What could be done however, was to use the same main armament fitted to the Dionysus class i.e. 2 x 3 - 16". Using the extra 5,000 tons of displacement to provide better armour and still keep a reasonable speed.
1941 and the Hephaestus and Panacea form Group Six hunting for the Scharnhorst and Gneisenau. Group six makes contact with S&G at 3.45pm on an October afternoon under lowering skies with squalls passing through. Less than ideal conditions. The Hephaestus with its 6x16" is force commanders ship, with the Panacea at the trail. The two battleships should be more than a match for S&G with their 9x13.8" (see AU S&G in DPKM). Early in the battle the Hephaestus receives three hits around the aft triple 16" turret which puts it out of action, and halving its broadside. The Panacea now proved that even with its antiquated look it could deal with any of the more modern upstarts. In just four broadsides the Panacea hit Gneisenau with 12 fourteen inch shells, forcing Gneisenau to be ordered to withdraw with Scharnhorst covering. One more salvo this time at Scharnhorst hit Scharnhorst with four 14" hits causing damage that Admiral Marschall decided was enough, and ordered both S&G into the oncoming storm where their superior speed took them quickly out of sight. Panacea had not got away scot free from the battle and fires in the central superstructure took some time to contain. While both ships could still fight and searched for S&G most of the next day, the Atlantean Admiralty ordered both ships to Norfolk Navy yard where their damage would be repaired.