A letter received by the municipality over the weekend states that the organization, presenting itself as the Mermaid Medical Association in Brooklyn, New York, was shocked to hear about the prize offered by the city.
This offer, the organization said, "badly and outrageously damages the legendary mermaid legacy."
In the letter, the organization informed the municipality that it had 10 days to take back its announcement on the prize, or else the organization would approach the International Court of Justice in Holland and demand that it intervene.
The suggested prize has raised a lot of interest across the world, promoting international networks like CNN and Sky News to send television crews to Kiryat Yam to interview Mayor Shmuel Siso. The Municipality has also begun building a mermaid-shaped statue near the beach.
The municipality was surprised by the letter, "particularly in light of the fact that we are not suggesting that anyone hunt the mermaid, if indeed there is one off the city's shores, but only prove that it exists," an official explained.
"In any case, we plan to appeal to the organization which sent the letter and suggest that it join the search for the mermaid in order to perpetuate and preserve it."