The local folk story, that gave the pub its name, occured one morning during the 18th Century. When a mermaid was found on the shingle beach at Church Ope Cove, as the people were going to a service at St. Andrew's Church. The creature's body was said to have ben taken up to the church, where she susquently died at noon. (http://www.darkdorset.co.uk/mermaid_of_church_ope_cove)
The current depiction of the mermaid on this sign that I own (and there have been other signs in the Mermaid Inn's history) is based on this painting, I believe is an interior book plate for Hans Christian Anderson's 'The Little Mermaid. Do any of the readers have any ideas on who the illustrator is?