Nested circulation models developed to date either exclude the flooding and drying process or prohibit flooding and drying of nested boundaries; they are therefore ill-suited to the accurate modelling of inter-tidal areas. The authors have developed a nested model with moving boundaries which permits flooding and drying of both the interior domain and the nested boundaries. The model uses a novel approach to boundary formulation; ghost cells are incorporated adjacent to the nested boundary cells so that the nested boundaries operate as internal boundaries. When combined with a tailored adaptive interpolation technique, the approach facilitates a dynamic internal boundary. Details of model development are presented with particular emphasis on the treatment of the nested boundary. Results are presented for Cork Harbour, a natural coastal system with an extensive inter-tidal zone and a complex flow regime which provided a rigorous test of model performance. The nested model was found to achieve the accuracy of a high resolution single grid model for a much lower computational cost.