The effect of mechanical stress on the electrical properties of Ag/silica nanocomposite sol-gel films, fabricated using an ultra-violet (UV) photo-reduction process, is studied over a large range of Ag volume fractions, phi. The ability to finely tune phi in situ by varying the UV exposure time enables the direct identification of the critical volume fraction, phi(star) approximate to 13.1%, around which the resistance changes by 6 orders of magnitude and the average piezoresistive gage factor, , peaks at 4330. is orders of magnitude larger than that of bulk silicon and phi(star) is close to the value expected for percolation in 3 dimensions. It is shown experimentally that this giant piezoresistance is the result of a stress-induced change in the average Ag cluster size that significantly modifies the sample resistance when phi similar to phi(star). In terms of the potential use of any composite material as a sensitive strain sensor, a sensor figure-of-merit (F) that accounts for both and for the measured, expected divergence in resistance fluctuations close to phi(star) is defined. It is shown that maximum F is achieved in composites slightly to the metallic side of the percolation transition. In the case studied here, the maximum value of F, which is 5-10 times larger than that measured on commercial strain gages under the same conditions, is obtained for phi approximate to 13.4%. The ability to finely tune phi in-situ therefore suggests that Ag/silica nano-composites could be the basis for a highly sensitive, low power, strain sensing technology.