A Greek shipping magnate was kidnapped at gunpoint in Athens this morning, fuelling fears that a new wave of domestic terrorism may be in the making.

Three masked men welding guns seized Pericles Panagopoulos, the owner of Attica Enterprises and Blue Star Ferries, one of Greece's most successful passenger shipping businesses, as he was about to be driven to his office in Kavouri, a seaside suburb, from his home in the same district.

Initial police reports say that Mr Papangopoulos, 70, and his driver were handcuffed, bundled into a waiting vehicle and their car set on fire. The driver, whose name was not released, was freed at Koropi, an outlying town less than five miles from Athens international airport, and reported the kidnapping to the local police.

The incident has sparked fears that domestic terrorism, believed to have been eradicated seven years ago, might be resurfacing. Last week masked men attacked a police guard detachment in central Athens with a Kalashnikov AK47 assault rifle, wounding one policeman who remains in serious condition.

It is the first time a Greek shipping tycoon has been a kidnap victim since 1996 when Yannis Peratikos, a shipowner, was gunned down by the 17 November terror group, which was eradicated in 2002 after a 27-year career of political murder and violence.

The Greek authorities believe that a new group, styling itself Revolutionary Struggle, has been attempting to claim the defunct 17 November's mantle. The shadowy group has been blamed for last week's attack on the police, though it has not issued a public statement.

Mr Panagopoulos and his son, Alexander, have maintained a very low profile. His fortuned soared in 1992 when the war in the former Yugoslavia flared and cut off Greece's land trade connections with the rest of Europe. Mr Panagopoulos built several fast luxury ferries to ply the Greece-Italy sea routes and revolutionised the country's passenger ferry businesses.

Many are the British lorry drivers who have swished in cruise-liner comfort at nearly 20 knots across the Adriatic Sea in the distinctive red and white Superfast Ferries.

In 2004 Mr Panagopoulos expanded his empire to include the island-hopping Blue Star Ferries, and three years later took a major interest in Minoan Lines.

Times Recommends

• Zardari still has to tackle tough questions
• Material evidence 'debunks' Turin Shroud
• BBC criticised over Uganda gay execution poll