Shadman,

Are other methods ruled out?

(time of flight laser, for example, a basic Hokuyo Lidar will give you range accuracies of the order of a few cm over a few metres to perhaps 10m)

Garry,

ToF or any other methods which require interaction with the reference (Like Sharp IR, Sonar) is ruled out as in my case, reference will not be - what should I say- present in a static way. Let me be clear- I need to find out the vertical movement of a vessel (heave) with fair precision. so, here i can't get help from the reference which might be the seabed (Still, seabed is also irregular) and GPS altitude is not an option because of the precision. 

Thanks.

Any other thought ?

In my opionion you can retrivie position using accelerometer only if you need a mesure band that is DC decoupled. I mean, it depends on the frequency bands you need.  Hope this helps.

Emiliano,

Are you indicating to the implementation of a band pass filter in the expected frequency band?

This will definitely help to reduce the error. but without a second reference this too would ultimately give a huge error. Actually what I am thinking about is a reference point in the motion itself which I would be tracking to "reset" the cumulative value of the distance.

Thanks a lot.

If your device has air connection to enviroment and could get near object barometric pressure at fixed altitude as reference try to find altitude from difference of pressure.  But qccuracy still is the question...