The estimated $940,000 paid for the recent release of the British woman Judith Tebbutt held hostage in Somalia since last September has re opened a war of words between the international shipping companies and the US and UK governments.

Both London and Washington have been increasingly insisted that ransom payments should not be paid as this only encourages the pirates.

(Read: How piracy is causing economic mayhem in EA)

UK Prime Minister David Cameron urged the creation of “an international task force on ransoms” adding that his aim was to “stop these payments because in the end they only ensure that crime pays.”

The US has been more specific with Andrew Shapiro, a senior official in the State Department saying that “a vicious circle has formed where ever-rising ransom payments have not just spurred pirate activity but have also enabled pirates to increase their operational capacity and sophistication.”

Latest evidence indicates that, although there has been a decline over the past two years in the number of pirate attacks, ransom payments have increased substantially, with $9.5 million paid for the release of the South Korean oil tanker Sambo Dream in November 2010.

Shipping companies say the approach of the US and UK governments could escalate the use of violence against seafarers.

The International Shipping Association warned that it would put all hostages “currently held in captivity by Somali pirates at the mercy of violent organised crime.”

A letter sent to Mr Cameron by Save our Seafarers which represents 30 shipping industry organisations pointed out that shipowners “have to be able to guarantee the safety of their seafarers as well as of their vessels and the cargo that they carry.”

Shipping companies have pointed out the dire economic implications if the international community adopts the British and American approach of refusing to pay ransoms.

High premiums

They say that insurance premiums for ships traversing the Gulf of Aden and off the East African coast are becoming prohibitive and could reach the stage where the majority of ships avoid the region altogether.

International trade would also become much more expensive with international shipping companies forced to re-route their vessels around the South African coast.

The Shipping Association said that if the majority of ships were forced to avoid the region this would have “an immeasurable impact on the regional economy.”