TWO Nottingham men were being questioned by HM Revenue and Customs last night after seven million smuggled cigarettes were seized.

The packs of Regal Kingsize were discovered in a raid on an industrial unit on the outskirts of Leicester city centre yesterday.

It is believed they had been smuggled into the UK from China in a consignment said to contain stoneware mugs.

The men being questioned about the haul are aged 28 and 39.

Customs are now examining the cigarettes to see if they are counterfeits – which can typically contain levels of poisons above those found in authentic brands.

Customs officials said fakes are hard to spot because smugglers have mastered the technique of producing packaging which is indistinguishable from the real thing.

Retailers welcomed the seizure, however they fear the recession could make smokers more willing to pay for illegally imported cigarettes and rolling tobacco.

Ken Patel, national spokesman for the Tobacco Retailers Alliance, said: "This is an excellent result, but the problem is only going to get worse.

"I've heard of packets of cigarettes from China selling for as little as £1.

"Some people are bound to go for that, even though they have no idea what is in these things."

HM Revenue and Customs, HMRC), estimated the loss to the public purse had the seven million cigarettes reached the black market at more than £1.2 million in lost duty.

Customs are urging people to report illegal tobacco sales in pubs and clubs, car boot sales and in the work place.

Information about tobacco smuggling and illegal sales can be passed to the customs hotline on 0800 59 5000.