Britain is urging the United Nations Security Council to adopt a resolution calling on all countries not to pay ransoms to kidnappers who use the money to fund terror groups.
Sir Mark Lyall Grant, Britain's UN ambassador, said the UK government estimated that over the last three years more than 70 million dollars (£43m) has been provided to al Qaida and other terrorist groups from ransoms paid to kidnappers.
Sir Mark has circulated a draft resolution calling on the 193 UN member states "to prevent terrorists from benefiting directly or indirectly from ransom payments".
A UN resolution adopted weeks after the September 11 2001 terrorist attacks in the United States already bans countries from financing terrorism, but Sir Mark said the proposed new resolution highlighted "the increasing threat" from kidnapping for ransom to benefit terrorists.
"We want to make it much more difficult for terrorists to benefit from this sort of financing," he said.
Sir Mark said he hoped the Security Council would approve the resolution this month, with support from all 15 members.
The British resolution follows up on the communique issued by leaders of the G8 major industrial powers at their summit in Northern Ireland in June.
The G8 communique expressed concern at "the increasingly fragmented and geographically diverse threat posed by terrorist groups including al Qaida and its affiliates" and "the threat posed by kidnapping for ransom by terrorists".
While the international community has made "significant progress in combating the flow of funds to terrorist organisations," the G8 estimated that al Qaida-affiliated and other Islamist extremist groups worldwide had collected tens of millions in ransoms since 2010.
"Payments to terrorists from Sahel to the Horn of Africa helped fuel instability in the region, and contributed to large scale attacks," the communique said, adding that ransom money also supports recruitment efforts and improvements in the operational capability of terrorist groups.
The leaders of the US, Russia, Britain, France, Germany, Italy, Canada and Japan said they "unequivocally reject the payment of ransoms to terrorists" and welcome efforts to prevent kidnapping and secure the safe release of hostages without paying ransom.
The G8 urged the Security Council to consider a new resolution "to increase international awareness of the threat of kidnapping for ransom, and ... to address and mitigate the threat".
A UN diplomat said there had been an upward trend in the overall number of kidnappings by terrorist groups and an average of more than two million dollars (£1.2m) being paid for every foreign hostage.
Ransom payments have become the single largest source of income for northern Africa's al Qaida in the Islamic Maghreb and al Qaida in the Arabian peninsula, the diplomat said.
The draft resolution addresses only ransom money to finance terrorism - not criminal kidnapping for ransom or piracy for financial purposes.