The wreck of the Costa Concordia is due to be refloated in the next two weeks in the latest stage of the most expensive ship recovery operation in history.

The salvage could involve a semi-submersible boat effectively carrying the ship from its resting place off the Italian island of Giglio to Genoa to be dismantled.

Costs to insurers have spiralled to almost £1.2 billion because wrecks are usually cut into pieces and carried away. But Italian authorities have decided that such a move would risk an environmentally sensitive stretch of coastline so the ship is being removed in one piece.

Captain Rahul Kanna, a ship insurance specialist at insurer Allianz told the Mail in Sunday: “The primary reason for the cost is the method of removal. It sets a very dangerous precedent.”

Costa Concordia hit rocks in January 2012 killing 32 people.

The ship was turned upright last September after salvage contractors reinforced the seabed beneath it.

Modern shipping is creating the possibility for much bigger losses as ships grow in size and start to use remote Arctic shipping lanes, insurers are warning.

“Any losses in the Arctic would be a logistic nightmare to arrange rescue and salvage,” Kenna was reported as saying.