SHOPS, pubs, clubs and other businesses have been warned to beware of the circulation of fake £20 bank notes around County Durham.

Convincing counterfeit notes have turned up in cash tills, and an alert has been issued by police and retail partnership groups.

Forged notes, suspected of being brought into circulation by gangs of travellers from Ireland, who are believed to be operating in league with Scottish drugs gangs, have been reported as far afield as the Highlands down to the south-west of England.

Among the victims so far in the region is publican Sandra Wilson, manager of the Dun Cow, at Burnmoor, near Chester-le-Street.

She discovered three £20 notes bearing an identical serial number while checking takings at the pub and restaurant in Primrose Hill. Mrs Wilson suspects a group of people who paid for meals and drinks with several £20 notes last week.

She reported it to police, who took two of the notes away for examination, but left the third for Mrs Jones to use to alert locals of their existence.

"I've lost £60, there's nothing I can do about it, but at least I can warn other people that these notes are going around," she said.

"They seem to be good copies, because it was only when I noticed three together with the same serial number that I had any suspicion.

"The quality of the paper is good, and the foil strip seems okay, so it's made me paranoid and I'm checking every note that comes in now."

Both English and Scottish notes appear to have been forged, and it is understood many of the fake Scottish notes bear the same number, DM483394.

Ann Tate, of the North-East Regional Crime Partnership, a joint operation involving police and the retail industry, said: "The Bank of England is concerned that counterfeiting is going to increase, but don't want to put the frighteners on people because of the risk to the economy."

The Bank of England has refused to comment, but a spokeswoman for the National Crime Intelligence Service said counterfeit currency makes up only a tiny fraction of one per cent of notes in circulation at any one time.

Paul Smedley, of the Retail Crime Initiative, said information is coming in from across the country of various gangs apparently passing the notes.