This paper presents a design for a shape memory alloy (SMA) based flexible manipulator on miniature underwater Remote Operated Vehicles (ROVs). Conventional manipulators using separate electrical motor actuators and sensors can lead to problems in installation and control of miniature ROV during underwater operation. The size, weight and dimensions of the conventional manipulators are the main reasons for load interactions between ROV and manipulator which affects the stability and control. As an alternative approach here, an SMA wire trained with two-way shape memory effect and the concept of segment actuation is presented as a flexible manipulator for miniature ROV. Forward kinematic expressions as a function of segment length are developed and used for understanding the workspace and manipulation capabilities of the manipulator. Actuation models for heating and cooling of the segments independently and the experimental validation of the analytical expressions for underwater application are presented. The effect of fluid interaction on the conventional manipulator and SMA manipulator and the stability and control effect on ROV are also discussed.