Imitation may be the sincerest form of flattery, but try telling that to the thousands of people whose jobs are jeopardised by counterfeiters intent on cashing in on Christmas.

Stroll around the main streets of Dublin, the markets in rural areas and the fairs and festivals all over the country, and the scale of the problem becomes apparent.

Nestling alongside the seasonal tinsel are fake Teletubbies, counterfeit Manchester United jerseys, and pirate video and music cassettes. It is an industry that's worth millions to the counterfeiters and one which legitimate businesses and employees are paying for through the nose.

"It is an enormous growth area," said Det Supt Pat Breheny, of the Garda Bureau of Fraud Investigation. "It affects almost all products including luxury goods, perfumes, designer clothes, well-known brands of sportswear, music and video goods."

Last year over 50 trademark protection actions were initiated by Manchester United plc in Ireland in goods ranging from replica kits to confectionery.

For the most part luxury items are imported here from countries outside the EU. Music and video piracy is carried out at home often using crude and inexpensive technology. Quality, for pirates, is not a priority.

A private investigator working with gardai on a clampdown on counterfeiters said he has been involved in the seizure of £100,000 of goods in the last two months: "We are operating seven days a week coming up to Christmas. Last week in Dublin we seized a £35,000 haul of the latest Spice Girls and Boyzone hits and consignments of Ralph Lauren, Lacoste, Calvin Klein, Adidas, Levi's and other designer fakes."

The investigator, who didn't wish to be named, added that the whole area is becoming more sophisticated. "The guys with their suitcases selling on the street aren't making much money," he said. "But further down the line the big guys are making a turnover of up to £40,000 per day." Worldwide, music piracy is a $5 billion industry. One in every three music products is estimated to be the work of a pirate. "The cost to the recording industry in Ireland is colossal," said Mr Dick Doyle, of the Irish Recording Music Association (IRMA). Piracy amounts to 5 per cent, around £3 million, of retail sales or anything up to 400,000 units.

There are about 50 known sellers of pirated goods in the country, according to Mr Doyle. "We have made a huge investment in ridding the streets of sellers," he said. In Dublin a number of well-known criminal families with links to drugs and organised crime are believed to be involved. In rural areas the piracy racket is thought to be run by a network of travelling families.

While gardai, in co-operation with organisations such as IRMA, have been hugely successful legislation is not strict enough, said Mr Doyle.

Counterfeiting is governed by two laws, the Trademark Act 1996 and the Copyright Act 1963 (amended in 1987), both of which allow for a maximum fine of £1,000.

Mr Doyle said they were lobbying for a new Copyright Act.

At the moment it is mostly music cassettes, but in other countries the sale of counterfeit CDs has taken over. A situation that, while every effort is being made to prevent it, is likely to happen here.

Mr Doyle has an answer for those who feel that counterfeiting and piracy don't hurt anyone and are of benefit to the consumer by providing them with goods they could not otherwise afford: "We would appeal to these people to realise that these funds are hurting a number of people. They are not getting value for money and they are, in some instances, funding organised crime."

The Minister for Labour, Trade and Consumer Affairs, Mr Kitt, has said he is committed to ensuring that "an effective and efficient regime for the protection of intellectual property is provided". A Department spokeswoman confirmed that the Copyright Act of 1963 was under review. "Christmas represents the icing on the counterfeiting cake to pirates," said Mr Brian Finnegan, of the Irish National Federation Against Copyright Theft (INFACT). The phenomenon nets pirates an estimated £13 million in video sales per annum.

"A well-equipped pirate can make 100 copies of a video tape in an hour. They sell them to markets, at car-boot sales, to the street traders and to some rental stores," he said. At least 3,000 jobs are lost in the sector a year due to reductions in revenue.

Events take an even more sinister turn at Christmas time. Children's movies form a massive part of the pirates' market and often films like the Disney classics are taped over another lucrative product, pornographic movies.

"The children's films are often only an hour long while the pornographic ones last up to two hours," said Mr Finnegan. Most of the time the pirates don't bother to blank out the remainder of the film, which often results in a child viewing hard-core pornography when their chosen film comes to an end.

Mr Finnegan's warning to parents is simple: "Don't buy counterfeit videos and if you must then view the film first."