It is a national disgrace to be profiteering from September 11

Tom Watson Labour MP

The newsletter was circulated to Lloyd's Names, the individuals who pledge their wealth to back insurance risks, saying that premiums "had shot up to a level where very large profits are possible".

The Association said it had taken measures to help members "take maximum advantage" of the improved conditions.

The news is likely to delete any public sympathy for the Names who must collectively stump up �246m because of the attacks - an average of �44,000 each.

Lloyd's has estimated that the terrorist attacks on the World Trade Center will cost it �1.3bn.

Soaring premiums

"Names may now have a historic opportunity for profitable underwriting," said the report, adding that Lloyd's was now enjoying "one of the strongest markets in living memory".

The report notes that aviation premiums have soared by between 400% and 600% following the disaster, while aviation war rates have jumped a massive 1,400%.

But these figures, and the way in which the newsletter was written, have been very badly received.

"I think it's very distasteful... to focus on the opportunity for increased profit as a result of a tragedy for a large number of people," said Norman Baker, Liberal Democrat MP for Lewes.

Tom Watson, Labour MP for West Bromwich East, said he planned to ask the government to put pressure on the Names to donate some of their profits to a New York charity.

'Tasteless'

"It is a national disgrace that they are profiteering from September 11.

"Everyone knows you have to got to make money in this world, but to be so tasteless was unacceptable," said Mr Watson.

The Association of Lloyd's Members refused to comment on the report.

Lloyd's spokesman Adrian Beeby was keen to stress that the newsletter came from a members' organization rather than from the company itself.