The effect of horizontal grid resolution on the horizontal relative dispersion of particle pairs has been investigated on a short time scale, i.e. one tidal M 2 cycle. Of particular interest is the tidal effect on dispersion and transports in coastal waters where small-scale flow features are important. A three-dimensional ocean model has been applied to simulate the tidal flow through the Moskstraumen Maelstrom outside Lofoten in northern Norway, well known for its strong current and whirlpools (Gjevik et al., Nature 388(6645):837–838, 1997; Moe et al., Cont Shelf Res 22(3):485–504, 2002). Simulations with spatial resolution down to 50 m have been carried out. Lagrangian tracers were passively advected with the flow, and Lyapunov exponents and power law exponents have been calculated to analyse the separation statistics. It is found that the relative dispersion of particles on a short time scale (12–24 h) is very sensitive to the grid size and that the spatial variability is also very large, ranging from 0 to 100 km2 over a distance of 100 m. This means that models for prediction of transport and dispersion of oil spills, fish eggs, sea lice etc. using a single diffusion coefficient will be of limited value, unless the models actually resolves the small-scale eddies of the tidal current.