Community leaders allege that dozens of businesses and individuals are being forced to give money under threat of violence. At least a dozen people have been assaulted for refusing to pay in the last month.
Some Turks are arming themselves - several have bought machine guns, and there are fears of plans to hire armed protection.
Police have confirmed that seven Turks and Kurds have been charged with blackmail in connection with alleged extortion in the last two months, the last this week.
It has also been confirmed that the special unit, set up a fortnight ago at Stoke Newington police station, north-east London - focus of the city's Turkish and Kurdish communities - has received 30 official complaints of extortion. Officers believe the actual incidence is much higher.
The two organisations - the Kurdistan Workers' Party (PKK) and the Revolutionary Left (Dev-Sol) - are both Marxist groups. The PKK is fighting a savage guerrilla war for control of the south-eastern region of Turkey in which around 8 million Kurds live. Dev-Sol is dedicated to destabilising the government, and has been responsible for the murder of British and American businessmen as well as Turkish officials. The PKK has kidnapped Western tourists to publicise its cause.
Both groups have been held responsible for bombings in Britain. Last month, PKK demonstrators firebombed a Turkish airline office in London, and bombed several other buildings. Despite this, the Home Office confirmed yesterday that neither organisation is proscribed in Britain.
Police believe that the PKK has raised pounds 2.5m from extortion in Britain last year, and Dev-Sol around pounds 350,000. But the recent increase in complaints indicates the start of a new campaign.
The local Turkish community is very concerned, and complains of police inaction - many do not know of the new unit. Senior members of the community warn that unless the police take action against the blackmailers, and proscribe both organisations, they will start to defend themselves.
One man, who asked not to be identified, confirmed that friends of his - businessmen running small factories in east London - have purchased machine guns.
'At the moment the community does not trust the police - they think the British government helps terrorists,' he said.
Some are thinking of hiring gunmen connected to the extreme right-wing National Salvation Party, based in Turkey.
There are allegations that Dev-Sol has burnt a workshop owned by one man who refused to pay, and police in Hull are investigating an incident three months ago in which Turks, who identified themselves as members of Dev-Sol, beat a restaurant owner after he refused to pay pounds 2,500.
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