Officers from the National Criminal Intelligence Service believe the money is being used to buy illegal drugs or is being diverted into money laundering operations.

Toys, such as Beanie Babies and the furry interactive pets called Furbies, are in considerable demand as Christmas approaches.

Some Beanie Babies have limited production runs, making them attractive to collectors who are prepared to pay high prices - and pushing up the value for counterfeiters.

Customers could pay up to £100 for a single fake product, NCIS officers said.

Some Beanies are "retired" and become collectors items

Up to £4m worth of fake Beanie Babies have been seized in Britain and Holland in the run-up to Christmas, according to officers.

Darren Couzens of NCIS's Interpol London office warned that production of counterfeit toys was linked to money laundering.

"We are very concerned that the UK is being targeted as an outlet for these counterfeit products," he said.

"The children's toys could prove to be dangerous, taking aside the issue of the known links to serious and organised crime such as drug importation and money laundering."

He urged people wanting to buy toys to go to reputable retailers and to purchase only goods with the marks of authentic products to ensure that they were not aiding criminals.

Among the fake Beanies being sold are Britannia Bear, which has a Union Jack on the front and can sell for up to £200 to collectors, and Maple Bear, which sports the Canadian flag and is not sold in the UK.

Princess Bears are also being counterfeited. The manufacturer, Ty, donates profits from sales of genuine Princess Bears to the Diana, Princess of Wales Memorial Fund, meaning that the counterfeiters are depriving the charity of cash.

Warning signs

A spokeswoman for Ty advised customers to go to a reputable stockist where all of the company's products are on display.

"They should try and buy Beanies for the correct prices," she added. The toys retail for between £4 and £6, she told BBC News Online.

The manufacturer of Furbies, Tiger Electronics, says it is not aware of any fakes entering the country but adds it is monitoring the situation closely.

Like Ty, Tiger is also advising buyers to seek out the toys from recognised independent retailers.

Spokeswoman Emma Carle said: "It's a highly technical toy so it should be easy to spot a fake as it won't be able to do everything a real Furby can."

Genuine Furbies contain two chips to make them perform, and counterfeiters are not going to be able to replicate these, she added.