Introducing the latest accessory to organised crime: fake handbags

But today, at Britain's largest outdoor market near Harlow, Essex, bags in the familiar chocolate leather and gold LV monogram - an international symbol of luxury - will be on sale for less than £10.

Despite the "genuine" logos, everyone knows that these are counterfeit goods. And it is not just Louis Vuitton: copies of all the top-end designer handbags are available at the North Weald market and hundreds of other street stalls around Britain, not to mention the eBay website and others like it.

Thousands of shoppers a week buy a fake handbag, on the basis that a little harmless copying of a luxury label never did any harm to anyone.

It is this assumption that is being challenged by experts, who are warning that the trade in counterfeit goods is based on sweatshops, virtual slavery and child labour and is used to financeterrorism and organised crime.

A report by Interpol found that groups such as al-Qa'ida were using the sales of counterfeit goods in Britain to fund their activities. Fake handbags can be as lucrative as drug smuggling, according to the report.

In fact, handbags are even more attractive than drugs because the trade is low risk, with paltry penalties for counterfeiting and less scrutiny by police.

The report concluded: "Interpol is sounding the alarm that Intellectual Property Crime is becoming the preferred method of funding for a number of terrorist groups.

"There are enough examples now of the funding of terrorist groups in this way for us to worry about the threat to public safety. We must take preventive measures now."

The first Global Congress on Combating Counterfeiting took place in Rome last October, when experts from countries around the world presented findings of the extent of counterfeit goods.

Nine per cent of all world trade is now in fake goods, the congress found. In the UK alone, 1.54 million counterfeit goods were seized by customs officials in 2003, an eightfold increase in the past five years.

Experts believe that almost 100 million fakes are sold in Britain every year. Fake goods are estimated to cost UK businesses more than £6bn a year.

Ruth Orchard, the director general of the Anti-Counterfeiting Group (ACG) in the UK, said: "If you talk about counterfeit goods, people tend to think of a "Del Boy" market stall where you can pick up a bit of a bargain that doesn't really hurt anyone, but nothing could be further from the truth. When I started this job, I was staggered by the scale of the thing, and it has grown exponentially in the last few years, partly because of the links with organised crime and terrorism.

"It may not happen all the time, but if you buy a fake designer handbag, you are indirectly financing serious, organised crime and groups like al-Qa'ida. This is the message that we have now got to get across."

Counterfeit goods are also likely to have been made in sweatshop conditions, according to Ms Orchard. "Where there is fiddly work to be done, like sewing on beads to handbags, people will often use children because they have smaller hands and work faster," she said. "We have heard of one situation in China where people were locked into the factory for a month and forced to work to get an order out."

Research by the ACG found that the fake goods market's keenest customers were not from the lowest social classes, but were young well-off women earning around £35,000 a year. Ms Orchard said: "Saying it is OK to buy a fake handbag needs to be a thing of the past."

The fast-selling counterfeits

ABELT BAG - Gucci

The real thing sells for £120, but replicas can be bought for less than £5. In a crackdown on counterfeits in Italy, a woman with a fake Gucci handbag was given a €10,000 fine.

DMURAKAMI BAG - Louis Vuitton

Among the most copied items by counterfeiters. LVMH, which makes the genuine article, employs a team to investigate fake goods sold on websites.

ASAUSAGE BAG - Burberry

Popular in the Far East, where most counterfeit goods are made. Burberry believes it has suffered because replicas have become a "chav" favourite.