They say the costs are causing more pain for an industry already notorious for its heavy outlays, tight margins and cutthroat competition.

'Paying ransoms to the Somali pirates is a bit like paying a hooker for sex,' one Hong Kong industry official said. 'Everyone knows it is going on, but no one wants to talk about it, certainly not the details of what actually happens.'

While much of the business is centred on London, the Hong Kong shipping industry is also closely involved. An estimated 10 per cent of global shipping is owned, managed or registered in the city.

Growing awareness of the new cottage industry surrounding ransom payments comes as negotiations continue to free 25 mainland crew held aboard a Chinese bulk carrier seized by pirates east of the Seychelles last month - one of 11 ships currently held off Somalia.

On Tuesday, the owners of a Spanish fishing trawler paid US$3.3 million to pirates to free 36 crew members.

Last week the United States formally raised objections to the paying of ransoms to Somali pirates during hearings at the UN. Washington's deputy ambassador to the UN, Rosemary DiCarlo, expressed fears that such payments had fuelled the recent surge in pirate attacks, and demanded a policy of 'no concessions'.

Few in the shipping industry, however, are listening to such warnings, as they brace for a further increase in hijackings when winter monsoons calm the Indian Ocean.

The Reverend Stephen Miller, who heads the Mission to Seafarers' Dubai operations, said: 'At the moment it is a business, for the pirates and everyone else ... and fortunately you have to say that means very few seafarers have been hurt, despite all the threats.

'If there is a move to escalate matters or take a harder line, I fear that lives will almost certainly be lost.'

One insurer said: 'No shipowner wants to be the first to refuse to pay. They know whoever does so will have the blood of his crew on his hands. You can take all the high roads you want, but that is the bottom line.'