The report attributed the rise to closer cooperation between law-enforcement agencies and industry groups.

But it added that IP crime continues to flourish in the UK, with 25% of pirated goods originating within the country.

The 98-page report produced by the government’s IP Crime Group highlighted the internet as a haven for criminals selling fakes on demand as well as the exploitation of children and links to people smugglers.

The report also stated that the Group was disappointed that despite the fact that "a wide range of enforcement agencies, IP rights holders and industry have been invited to contribute, in some sectors the returns were low, and in some cases there was a nil response".

Speaking at the launch of the report on December 12, Lord Triesman, Minister for Intellectual Property, said there is still much to do to tackle IP crime and stressed the need for people to be educated about the "very damaging consequences of counterfeiting and piracy".

He said: "One way or another everyone ends up paying through the nose for this illegal trade. Whether through lost jobs or lost profits for businesses; higher costs being passed back to the consumer; risks posed to health; or the stifling of innovation, it is all of us who lose out."

He added that the central aim of the strategy is to ensure "consumers do not create a market for criminals to exploit".

The report estimates that criminals in the UK earn about £1.3 billion ($2.6 billion) each year. The cost to taxpayers of counterfeit cigarettes alone was estimated to be £2.9 billion in 2006.

Assistant Chief Constable Giles York, who is in charge of IP crime, chose not to exaggerate the progress of the strategy and believed it was too naïve to "celebrate total success just yet".

The report also listed nine recommendations to tackle IP crime, one of which is the need for the UK Intellectual Property Office to establish a secure website for law-enforcement agencies and industry bodies to share intelligence.