A legal ban on weapon-toting protection staff will be relaxed so that firms can apply for a licence to have them on board in danger zones.
The Prime Minister said radical action was required because the increasing ability of sea-borne Somali criminals to hijack and ransom ships had become "a complete stain on our world".
He unveiled the measure after talks at a Commonwealth summit in Australia with leaders of countries in the Horn of Africa over the escalating problem faced in waters off their shores.
Under the plans, the Home Secretary will be given the power to license vessels to carry armed security, including automatic weapons, currently prohibited under firearms laws.
Officials said around 200 were expected to be in line to take up the offer, which would only apply for voyages through particular waters in the affected region. It is expected to be used by commercial firms rather than private sailors - such as hostage victims Paul and Rachel Chandler.
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