Consumers are being warned not to buy counterfeit goods this Christmas.
The government claims the purchase of such items can damage both the economy and shoppers' health.
It issued the warning today, after publishing a new report revealing an increase in the number of people prosecuted over the sale of counterfeit products.
There are now more than 1,000 successful prosecutions of such fraudsters each year, according to the latest intellectual property crime report released by the Department for Innovation, Universities and Skills (DIUS).
Officials say closer cooperation between law enforcement agencies and industry groups is behind the rise, with just 600 successful prosecutions brought against those who sold fake goods in 2004 the year a national strategy on intellectual property crime was launched.
However ministers stress there is more to be done to tackle the problem, with the intellectual property crime market in the UK estimated to be worth around £1.3 billion a year.
The government claims the trade in counterfeit cigarettes alone cost UK taxpayers £2.9 billion in 2006, with officials warning those involved in the sale of fake goods are also targeting the markets for designer clothing, music and films, luxury and electrical goods, toys and alcohol.
In addition to the economic cost of such trade, ministers warn there are also various health risks to consumers in relation to the sale of fake goods. Counterfeit cigarettes often contain far higher levels of tar than legally-made tobacco, while some illicitly made alcohol has been found to use poisonous methanol, officials say.
Meanwhile fake pharmaceutical goods can contain the incorrect active ingredient, or none at all, and electrical goods can be unsafe or incompatible with household electricity supplies, the government claims.
Intellectual property minister Lord Triesman said the government wanted to ensure consumers did not create a market for counterfeit goods which criminals could exploit.
"Buying cheap goods may seem like a bargain especially in the run up to Christmas but that doesn't mean you are getting a good deal, in fact you are probably worse off in the long run," the minister stressed.
"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," Lord Triesman concluded.