Hi Neil
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On the map it looks like you could be on to something or perhaps even an ancient meteor crater, but...
...what you are actually looking at is part of the Aegean island arc system, generated by northward subduction of the African plate along the arcuate Hellenic trench system located around six miles south of Crete.
If you dig up an internet map of the plate tectonics in the Mediterranean/black sea & nearby 'watery bits' of the map you may be surprised at what you see. It's an eye opener.
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Go to the link below and look at section 1.2:
http://www.decadevolcano.net/santorini/santorini_geology_geography.htm
There is a yellow map with this written underneath: "The South Aegean Volcanic Arc and the tectonic setting of Santorini". To the South of Crete on the map is a black line ~ that's the Hellenic trench system I mentioned above.
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Michael
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