SHOPKEEPERS who are losing hundreds of pounds a week to black-market racketeers last night welcomed the publication of a report that highlights the extent of the problem.

A committee of MPs has found the illegal trade in hand-rolling tobacco is "out of control", with the duty paid on only three out of every ten packets used in the UK.

The findings of the Commons Treasury sub-committee were welcomed by Retailers Against Smuggling - the campaign of the Tobacco Alliance - which says shops are losing an average of £1,000-a- week in sales.

John Abbott, a Darlington shopkeeper and the North-East spokesman for the retailers' group, said: "The Treasury sub-committee report has highlighted what we as retailers have known for some time - tobacco smuggling in the UK is rife."

He said it was "forcing legitimate independent shopkeepers to close their shops and make their staff redundant.

"In our recent survey, one in four corner shopkeepers were considering closing down as a result of the effect that tobacco smuggling was having.

"In the same survey, 73 per cent of corner shopkeepers told us that the way to reduce tobacco smuggling was to reduce or freeze taxes on tob-acco.

"How are we supposed to compete with the smugglers when, thanks to the high level of tobacco tax in the UK, the cost of a packet of hand- rolling tobacco here is £9.90 and the cost in Poland, for example, is £1.07?"

Last October, The Northern Echo reported that 140 kilos of hand-rolling tobacco was seized, with 800,000 cigarettes, counterfeit watches, weapons and a car, during an 11-day Customs operation in the region.

The tobacco was found during raids at North Shields ferry terminal, houses and shops in Tyne and Wear and north Durham, and Newcastle Airport.

A Customs spokesman said the crackdown on smugg- ling had led to criminals peddling counterfeit cigarettes instead, and an awareness campaign about their increased dangers was launched last year