Jonny, can you tell us a little more about the shaft, i.e. does it have plain plastic or bronze bushes in the end or is it fitted with ball bearings? Sometimes plain plastic bushes can be a really bad fit and leak way too much.
The problem with some scale models is that the inboard end of the shaft has to be below the water line and hence unforgiving when it comes to sealing it. The challenge is that is you try to seal the shaft with grease or vaseline to keep the water out you put more load on the motor. If you have plenty of reserve power this might be acceptable.
When I built a raised quarterdeck coaster I used ball bearings at either end and still incorporated a dam in the hull to collect any ingress. On trials though there was no sign of any water coming in. Assuming you cannot now fit ball bearings you have to make the best you can of it. The best approach is to try to stop the water entering in the first place so concentrate on the outside bush. If you get water in the tube it will eventually lead to rusting of the shaft and possible seizure so it is better to try to prevent ingress in the first place. This will require as close a fit as possible of the stern bush coupled with a thrust washer and possible use of vaseline at that end. If that bush is loose then you might even be worth considering replacing it.
As has been mentioned, as many solutions as there are members on here but at least there are plenty of things to try!