Tobacco firms say that one in three cigarettes smoked in the UK is brought in from abroad.

The group based its figures on the analysis of discarded cigarette packs collected by researchers at football grounds across the country over the past three seasons.

Illegal trade in tobacco could be harming retailers but UK price is twice that of EU counterparts.

They found that on average a third of the packs had been brought into the country from abroad - either legally or smuggled and sold here illegally.

Most were found at Ipswich where 41% of the packets had not been taxed in the UK.

"The evidence is that smoking is now on the rise for the first time in 25 years because the real price of cigarettes has actually dropped," explains says John Carlisle from the Tobacco Manufacturers Association (TMA).

"The government putting the price higher makes more incentive for the smuggler to sell his goods and the real price is now something like �2.50 per pack of 20 whereas the retail price is �4.20."

Customs "too weak"

The treasury is losing �4bn a year in revenue, much more than from losses incurred as a result of bootlegging and smuggling of alcoholic drinks.

The government says it is combating the problem.

Last year it recruited 300 more customs officers, but the TMA claims that even with this increase in resources, HM Customs and Excise's powers to control the smuggling is limited, suggesting that the seizures made are still too small to have any impact in solving the problem.

Tobacco Manufacturers' Association say

1 in 3 cigarettes smoked in the UK now avoids UK taxes Non-duty paid cigarette consumption is now over 40% in some parts of the country Official figures show tax loss as a result of smuggling was �5bn in 1997-1999 The price of a typical pack of cigarettes has risen from �3.12 to �4.22 since 1997. Cigarette consumption has risen since 1997 following 25 years of decline.

The TMA has therefore called for the government to review their policy on duty.

However, not all sympathies lie on the side of the manufacturer as Jonathan Fell, a Tobacco Analyst at Merrill Lynch explains.

"The real heart of the problem is that most people who buy these cigarettes down the pub or on holiday don't really think it is anything illegal."

"They see that on the continent they can buy cigarettes at half the price than in the UK and think thanks very much we'll have some of that."

A delegation of Tobacco industry executives are calling for a reduction or freeze on duty arguing against the government�s line that high taxes discourage smoking but instead just provides the perfect condition for a thriving black market to continue.