The Consumers Association and the National Consumer Council say the number of companies breaking the code of conduct by misleading customers is increasing.
Undercover checks by the NCC were carried out on shops, supermarkets, garden centres and DIY stores at the request of the Department of the Environment.
The survey found that misleading claims on some products were down - with fewer spurious claims about CFC-free aerosols and lead-free paint.
But other products - including toilet rolls, sanitary products, light bulbs and bin bags - had seen misleading and confusing claims in breach of the code multiply.
A green claims code was introduced by the government last year to cover any claim about the environmental nature of goods.
It states that a green claim must be clear, accurate and capable of being supported by independently verifiable scientific evidence.
The claim must also be significant in terms of the overall environmental impact of the product during its life cycle.
Report author Teresa Smallbone said: "I think the average shopper is going to be very misled and rather confused by what they find."
The NCC is now calling on the government to give the green code "sharp teeth" to eliminate misleading and false claims.
It says the only way to do this is for the code to be legally enforceable with penalties for those who flout it.
Director Anna Bradley said: "More than one-in-three consumers want to do their bit for the environment when they go shopping.
"But if the environmental information on products is misleading it shatters consumers' trust in these claims, and ultimately puts them off attempting to buy green at all.
"That's why it's important - for individual consumer choice as well as for the environment - that consumers have confidence in claims about a product's environmental credentials.
"Our shopping exercise shows that the green claims code had had very little impact in raising standards of clarity, honesty and relevance in environmental labelling."
The government welcomed the report and promised to crack down on companies which made false environmental claims about their products.
The NCC's findings would be passed to the Office for Fair Trading, he said.
Iceland gives cold shoulder to additives
(06 Oct 99 | Wales)
GM food firm rapped over adverts
(11 Aug 99 | UK)
National Consumer Council
Consumers Association: Which? online
The BBC is not responsible for the content of external internet sites.
Next steps for peace
Blairs' surprise over baby
Bowled over by Lord's
Beef row 'compromise' under fire
Hamilton 'would sell mother'
Industry misses new trains target
Quins fightback shocks Cardiff
(From Sport)
Vodafone takeover battle heats up
(From Business)
IRA ceasefire challenge rejected
Thousands celebrate Asian culture
Christie could get two-year ban
(From Sport)
Colleagues remember Compo
(From Entertainment)
Mother pleads for baby's return
Toys withdrawn in E.coli health scare
Nurses role set to expand
(From Health)
Israeli PM's plane in accident
More lottery cash for grassroots
Pro-lifers plan shock launch
Double killer gets life
Cold 'cure' comes one step closer
(From Health)
Straw on trial over jury reform
(From UK Politics)
Tatchell calls for rights probe into Mugabe
Ex-spy stays out in the cold
Blair warns Livingstone
(From UK Politics)
Smear equipment `misses cancers'
(From Health)
Boyzone star gets in Christmas spirit
(From Entertainment)
Fake bubbly warning
Murder jury hears dead girl's diary
Germ warfare fiasco revealed
(From UK Politics)
Blair babe triggers tabloid frenzy
Tourists shot by mistake
A new look for News Online