The prime minister has announced that ships sailing under a British flag will be able to carry armed guards to protect them from pirates.
David Cameron wants to combat the risks to shipping off the coast of Somalia, where 49 of the world's 53 hijackings took place last year.
No ship carrying armed security has yet been hijacked.
Up to 200 ships flying the red ensign - the British merchant navy flag - regularly sail close to Somalia, and officials estimate that about half of those would apply for permission to have armed guards.
It is thought that many British-registered ships already carry armed guards, taking advantage of a grey area in the law.
Mr Cameron said that he wanted to legalise armed guards after talks in Australia with Commonwealth leaders over the increasing problems with pirates.
However, armed guards would only be permitted while passing though dangerous waters, such as the Red Sea and the Gulf of Aden.
When asked if he was comfortable with giving private security operatives the right to "shoot to kill" if necessary, he told BBC1's Andrew Marr show: "We have to make choices."
He added: "Frankly, the extend of the hijack and ransom of ships round the Horn of Africa is a complete stain on our world.
"The fact that a bunch of pirates in Somalia are managing to hold to ransom the rest of the world and our trading system is a complete insult and the rest of the world needs to come together with much more vigour."
Peter Cook, director of the Security Association for the Maritime Industry (Sami) said: "We welcome this carefully considered change of policy and we will continue with our accreditation programme to ensure that maritime security guards are of the highest standards."
Mr Cook said that many armed guards were former Royal Navy and Royal Marines personnel and said: "With the current redundancies it has provided them with an ideal place to go because their levels of professionalism are very high and they are doing something very worthwhile with their skills."