"Eco-pirate" Paul Watson is losing a race against time to recover his flagship boat, the Steve Irwin, which has been impounded in Shetland.

The world's most radical conservationist, Watson is being sued for $1.4m (£850,000) by a Maltese fishing company, Fish and Fish, one of Europe's leading tuna processors. The law suit against Watson's Sea Shepherd Conservation Society was filed last year after activists aboard the Steve Irwin freed 800 bluefin tuna from a pen in the Mediterranean.

Watson has just 10 days to raise the bond required to release the boat, which was named after the late Australian conservationist. It has been impounded in the harbour at Lerwick ever since the company sued him for damages. By last night, the society had raised about $500,000, after a global Twitter campaign and appeals to celebrities who have helped Watson in the past.

A co-founder of Greenpeace, Watson was picking up volunteer crew and restocking the Steve Irwin in preparation for a trip to protest against whaling in the Faroe Islands when he was served with the writ. The tuna cage that had been intercepted 40 miles off the Libyan coast in June last year held an estimated 35 tons of fish.

After a fracas in which there was hand-to-hand fighting between the two crews, Sea Shepherd sent in divers to release the 800 tuna.

Joseph Caruana, the owner of Fish and Fish, declined to speak to the Observer, but has claimed in the Maltese press that two of his divers were injured in the encounter, an allegation strongly denied by Watson. "Sea Shepherd cannot continue behaving this way. My aim is for justice to be done. I wanted to show that we mean business and we will fight our cause," he said.

Malta has become a global capital of tuna fishing, exporting £80m-worth of the fish, mainly to the Middle East and Japan. Ships surround the fish with nets and then tow them to cages, where they are fattened for export.

Catches are limited to two weeks a year and ship owners have been given strict quotas to meet by governments, but, with little policing, the industry has been able to openly flout the law in Libyan waters.

Greenpeace and WWF called last month for a suspension of the Mediterranean tuna fishing season, saying that stocks were at critically low levels. "Mediterranean bluefin tuna is on the slippery slope to collapse," said Dr Sergi Tudela, of WWF Mediterranean.

In a statement last week, Watson said that if Sea Shepherd could not raise the money, the Steve Irwin could be held indefinitely and possibly sold. "This would not only be a financial hardship, but it could threaten our ability to defend whales in the Southern Ocean Whale Sanctuary from the Japanese whaling fleet this December. Fish and Fish are claiming damages for bluefin tuna we believe were illegally caught after the season had closed," he said.

In a separate incident, the Namibian government has declared Sea Shepherd a "threat to national security" after it tried to film the annual slaughter of 90,000 Cape fur seals on the west African coast. It is a crime to document seal clubbing in Namibia.

"The group tried to document the seal slaughter, but was detected by Namibian special forces," said Watson. "It was a good plan, but Sea Shepherd is no match for the Namibian military." The group fled to South Africa, having had its rooms burgled and cameras destroyed.