The country is being flooded with fake DVDs and is becoming a counterfeit haven, according to the chairman of a chain of video and DVD rental stores.

Iain Muspratt, chairman of Home Entertainment, which runs Choice Video and DVD stores, said a sharp rise in counterfeit DVDs had hit the demand for film rentals. He warned that activities of criminal gangs who used illegal immigrants to hawk the discs round pubs and restaurants were becoming endemic. ''You don't associate the UK with piracy, but it has become a very major problem. The growth and extent is alarming," he said.