From Holden:

A member of the Italian Parliament has confirmed that his government paid a $1 million ransom for two hostages:

Despite an official government denial, a leading parliament member said he believed Italy had handed over about $US1 million ($1.39 million) to secure their freedom.

“In principle, one should not give in to ransoms. But this time, they had to,” Gustavo Selva, the head of the Foreign Affairs committee of the Chamber of Deputies, said on France’s RTL radio.

“The lives of the two girls was the most important thing.”

[snip]

Mr Selva belongs to National Alliance, a right-wing party in Premier Silvio Berlusconi’s conservative government.

[snip]

Mr Selva, however, suggested that the Government had to deny paying a ransom in order to save face. With more than a score of other hostages from various nations still in Iraq, the issue of ransom has practical and ethical ramifications.

Asked about a Kuwaiti newspaper report that $US1 million ($1.39 million) was paid, Mr Selva said: “The amount is probably correct.”

[snip]

La Stampa, a moderate Turin daily, quoted Mr Berlusconi as brushing off the questions over ransom, saying: “About this business, we won’t say anything.”

Giving in to the demands of terrorists worked so well for Berlusconi that Tony Blair wants to give it a whirl:

British Prime Minister Tony Blair said on Wednesday he was ready to open up contact with captors of a British hostage in Iraq, shown on video begging Blair to save his life.

[snip]

“They’ve made no attempt to have any contact with us at all. If they did make contact, it would be something we would immediately respond to,” Blair told reporters on the fringes of his ruling Labour Party’s annual conference in the southern town of Brighton.