Despite Doge Michiel's apparent will to pursue a peaceful solution, outrage in Venice itself swung popular opinion in the favour of full scale war against Byzantium.
[1] Although trade was very important for the Byzantine economy, political relations with Italian merchants soured at times.
Tensions rose in 1171; Manuel I ordered attacks on Venetian merchants, property and ships.
[2][3] [4][5] The disastrous defeat of Venice in this war was one of the greatest military blunders in the city-state's history, and permanently altered Venice's position on foreign affairs.
A formal truce between the two empires would not be ratified until 1177, with minor skirmishes continuing until then.