Kidnapped British couple Paul and Rachel Chandler might be freed for much less than a $7 million ransom demand, a hostage negotiator told Sky News.

Andrew Mwangura, co-ordinator of the East African Seafarers' Assistance Program, told the Mail on Sunday he had been working with Somali elders to help free the couple.

Chandler, a 59-year-old retired quantity surveyor, and his wife Rachel, 55, were kidnapped on Oct. 23 while sailing in the Indian Ocean.

They had been taking their cutter-rigged vessel, the Lynn Rival, from the Seychelles towards Tanzania.

SLIDESHOW: British Couple Kidnapped by Pirates

"The (Somali) pirates realize now that the Chandlers are not rich people. They will be persuaded to lower their demand, maybe to $165,000," Mwangura was quoted by Sky News.

Yesterday, the British Government said it would not pay a $7 million ransom to secure the couple's freedom.

"The pirates want money and the British government and the family of the Chandlers want them back so they will have to agree on something," Sky News Gulf correspondent Ashish Joshi said.

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