This paper describes a compact planar motion mechanism based captive ship model manoeuvring test system designed and developed at Istanbul Technical University (ITU). The system, designated as ITU-PMM, is particularly designed to be light and simple to be installed on the existing towing carriage in a 160-m-long towing tank. The main components of the motion controller based system are; two servo-motors with high precision encoders, a reduction gear with very low backlash for yaw motion, precision linear motion ball-screws, a six component load cell for force and moment measurements and a data acquisition system. ITU-PMM is primarily designed to perform standard captive manoeuvring tests, including the static tests such as steady drift and oblique towing with rudder deflection and the dynamic tests such as pure sway, pure yaw and yaw and drift. However, since the servo motors are independently controlled non-standard tests could also be carried out. In order to calibrate and validate the system standard PMM tests were carried out with a SIMMAN 2008 benchmark case model (DTMB 5415) representing high speed displacement vessel. The measured forces and moment and the derived manoeuvring derivatives are compared with those obtained by major test facilities. The sensitivity of the system is verified by an uncertainty analysis.