A new 'in-line' fibre-optic sensor based on the excitation of surface plasmons in a thin metal film deposited in the polished cladding of the fibre is presented. Optical-power transmission characteristics of the device, for TM-polarized light, have been both experimentally and theoretically investigated. The obtained results show the feasibility of practical designs with in-line fibre-optic configuration for a large range of optical sensor applications.