SHOPS, pubs, clubs have been warned to beware of fake £20 bank notes circulating in the region.

Convincing counterfeit notes have turned up in tills in the North-East, prompting police and retail groups to issue an alert.

Forged notes, suspected of being brought into circulation by gangs of travellers from Ireland, working with Scottish drugs gangs, have been found across the UK.

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

She discovered three £20 notes with the same serial number while checking takings at the pub and restaurant, in Primrose Hill.

Mrs Wilson suspects a group of people who she believes paid for meals and drinks with the notes last week.

She reported the fakes to the 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. 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 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 refused to comment.

A spokeswoman for the National Crime Intelligence Service said counterfeit currency made up only a tiny fraction of of notes in circulation at any one time.

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