Cigarettes and alcohol seized by Customs officers often appear on the black market because of a lack of controls over stores, the National Audit Office has concluded.

Edward Leigh, chairman of the House of Commons public accounts committee, said: "There were no effective controls over the contractors appointed to store seized goods. I am appalled at this state of affairs which provided opportunities for fraud at every stage."

The NAO said found that £2.1 billion is still owed to Customs in indirect taxes - an increase of 55 per cent in a year.