Customs officers expect to seize a record 2bn smuggled cigarettes this year as organised gangs using giant containers increasingly take over an illegal trade once dominated by bootleggers and white van man.

The number of smuggled cigarettes captured at ports has already soared above the 1.3bn uncovered in 1999, according to customs sources, with container fraud accounting for an estimated three-quarters of those detected. Seizures have risen from 32m barely five years ago to the current level and some se nior figures in customs suspect they are only stopping a tenth of the smuggled cigarettes flooding into Britain. Treasury ministers calculate they are losing £2.5bn in taxes but claims by Imperial Tobacco that one in every three cigarettes smoked are smuggled or bought overseas suggests that the total could be much higher. As many as half the cigarettes seized by customs are believed to have been made by Bristol-based Imperial Tobacco which this week reported surging demand on the continent as sales continue to fall in the UK. A container labelled children's knitwear inspected in August at Avonmouth was found to contain nearly 5m cigarettes, half of them Imperial's Superking brand and half Gallaher's Sovereign make. A week later at Portbury docks, another container was found to carry 7m cigarettes, a third of them packs of Imperial's Regal and again the rest were Gallaher's Sovereign. An investigation into tobacco smuggling by the television company HTV screened last night in the west country named Imperial as one of the biggest exporters to Cyprus, which anti-smoking campaigners claim is at the hub of a smuggling ring. British companies, said HTV, have transported an estimated 12bn cigarettes to Cyprus - a country with a population of about 600,000 - over the past two years and many are believed to have illegally found their way back into Britain. Dawn Primarolo, the Treasury's paymaster-general responsible for customs and excise, told the programme: "It does raise questions about whether all those cigarettes actually stay in Cyprus, whether they go somewhere else legitimately, moving on to another country or whether there is something else going on." Cyprus is an important staging post for legitimate exports to the Middle East and an Imperial spokeswoman yesterday said the company and its wholesalers, shippers and other contacts acted lawfully. "Customs know exactly where we are exporting and the name of the customers," she said. "We take great care in the agents and distributors we use and all our products are exported perfectly legally." Sales to Cyprus are thought to have grown dramatically after European customs effectively ended huge sales to Andorra where every man, woman and child would have had to smoke 140 a day if they had not been smuggled back to Britain and other countries. The government has launched an investigation into evidence that British American Tobacco has exploited smuggling and tobacco companies are facing growing public scrutiny.

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