The warning is contained in the annual report of the North's Organised Crime Task Force (OCTF) which will be launched by security minister, Paul Goggins, tomorrow. It is expected to repeat International Monitoring Commission (IMC) claims that loyalist paramilitaries and senior Provisional IRA figures, as individuals, are still involved in organised crime.

The illicit tobacco trade is moving away from genuine cigarettes smuggled from mainland Europe to fake produce imported from Asia. Research shows counterfeits of brand-name cigarettes contain five times as much cadmium as normal ones.

Cadmium can severely damage the lungs and is linked with kidney disease. Fake cigarettes carry nearly six times as much lead which damages the organs and nervous system.

Levels of arsenic . . . which increases the risks of lung, liver and other cancers . . . were also found in the produce.

Fake cigarettes seized by customs in the North contained 160% more tar, 80% more nicotine, and 133% more carbon dioxide than genuine cigarettes.

Counterfeit cigarettes are widely sold on both sides of the border at markets, or by hawkers in pubs or housing estates. Last year, over six million cigarettes were seized by customs in Newry. One arrest was made. The cargo had arrived from Malaysia with the contents described as flat-pack furniture.

Over three million cigarettes, smuggled in sheets of plate glass, were also seized last year in a container arriving in Belfast docks from China.

The Organised Crime Task Force brings together the Police Service of Northern Ireland (PSNI), customs, British government departments, representatives from the business community, and the Assets Recovery Agency (ARA), in the fight against organised crime.

It is understood the report will reveal a significant rise from last year in the seizure of counterfeit goods including DVDs, CDs, computer games, alcohol, and perfume.

In 2004/5, the PSNI seized £7m worth of fake produce and production equipment such as computers and CD burners.

The OCTF report will examine the North's growing illegal drugs market. It is understood there has been a growth in the use of cocaine in particular. The report will also detail the growth in counterfeit medicines, including Viagra-type drugs and illegal veterinary drugs.

The need for continuing cooperation with the Garda and the Criminal Assets Bureau in tackling fuel and money laundering, illegal dumping and other activities will be stressed.

The task force is expected to detail increasing reports of extortion from businesses in the North. The IMC has previously blamed loyalist paramilitaries for the blackmail and intimidation of businessmen. The PSNI recently launched an extortion helpline.

Chief constable Hugh Orde and the Northern Ireland head of ARA, Alan McQuillan, will attend tomorrow's launch. Last year, almost £16m worth of assets were frozen or taxed by ARA.

The task force report is also expected to show a huge increase on previous years in criminal assets seized, confiscated or restrained by police and customs.