HEALTH secretary Alan Milburn has ordered an urgent inquiry into allegations that an organised cigarette-smuggling ring is operating within his local hospital.

The move follows a tip-off to Mr Milburn that a sophisticated network within Darlington's Memorial Hospital had been set up to supply blackmarket cigarettes.

A letter to the Health Secretary claimed that there was "a significant distribution network of contraband cigarette sales which flows freely within the Memorial Hospital Darlington which satisfies both staff and patient needs".

A spokeswoman for Alan Milburn's constituency office said: "We raised it with the hospital who are taking it very seriously."

John Saxby, chief executive of the South Durham Health Care NHS Trust, warned that any staff caught selling contraband cigarettes faced dismissal.

Mr Saxby confirmed that he had received a letter from Mr Milburn, who had been approached by one of his constituents whose wife works at the 450-bed hospital.

Mr Saxby issued a warning that such behaviour would not be tolerated in a hospital.

"We have to make it absolutely plain that any member of staff involved in selling contraband cigarettes would face two consequences. They would be reported to the relevant authorities and they would undoubtedly be dismissed. It is illegal."

Mr Saxby said cigarettes were not allowed to be sold in the hospital and in-patients could only smoke under exceptional circumstances and at the discretion of ward sisters.

And apart from a couple of "out-of-the-way" areas set aside for staff, smoking is prohibited.

Rob Hastings-Trew, the Customs spokesman for Northern England, said he was appalled at the idea that a hospital could be involved in the distribution of smuggled cigarettes.

"Bearing in mind that a hospital is a place people go to be cured and that smoking contributes to more than 120,000 deaths every year, it would horrify me if it was going on," he said.

However union chiefs said they were unaware of a smuggling ring.

Andy Craggs, a pathology technician at Darlington Memorial Hospital and a workplace representative of the Manufacturing, Science, Finance union MSF, said he had worked at the hospital for more than 18 years and had never heard of anyone being offered smuggled cigarettes.

"I genuinely know absolutely nothing about this," he said.

The trade in smuggled cigarettes is growing rapidly in the North-East, despite a crackdown by Customs officials.

Only last week, more than half a million smuggled cigarettes were seized at Teesside Airport.

Customs officials say the North-East seems particularly receptive to smuggled cigarettes because of socio-economic reasons.

Tobacco smuggling is believed to have cost the British Treasury a total of £2.5bn last year.

Last year, Customs officers seized 1.7 billion cigarettes. Most of them came from China and The Far East, the Baltic, the Balkans and southern Africa.

Mr Hastings-Trew said people should not dismiss cigarette smuggling as an amateur activity carried out by so-called "white van man".

There was evidence to suggest that criminal gangs were now responsible for about 80 per cent of all smuggled tobacco, he added.

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