Mobile phones stolen in Britain are being re-sold in more than 40 countries in a trade worth millions of pounds, a police investigation has discovered.

A study of more than 1,000 mobiles stolen in Britain revealed that they ended up in at least 46 different countries, including Iraq, Peru, Australia, Dubai, China and Jamaica.

Gangs use a network of second-hand shops and criminals to collect tens of thousands of mobiles stolen in street muggings and house break-ins, which are then taken abroad and sold.

Handsets are relatively cheap in Britain, with expensive call charges, whereas abroad they are unsubsidised by the phone companies and can cost hundreds of pounds. A stolen video mobile worth £30-£40 to a criminal in the UK could be worth £200 abroad.

The police have long known that mobiles are smuggled to many countries. But only now has an investigation by the National Mobile Phone Crime Unit uncovered an extraordinary international network for stolen handsets. The unit, which was set up in November 2003, examined details of about 2,000 of the 700,000 mobiles reported stolen every year in the UK.

Just over half had been reported stolen along with their unique identifying code, which allows networks to bar the phone, rendering it useless in the UK. But because British mobiles operate on the GSM frequency, the barred handsets can be used outside the UK with a new SIM card.

Analysts from the national phone unit contacted foreign networks and asked them to track the more than 1,000 stolen handsets and establish whether they had been used abroad.

The results showed that almost every country tested found that a stolen mobile was being used. This included India, South Africa, Albania, Brazil, the United States and Namibia. Police have also intercepted criminals at airports and ports trying to smuggle suitcases of stolen handsets out of the UK.

Superintendent Eddie Thomson, head of the National Mobile Phone Crime Unit, said: "This study provides a snap shot of what is happening. It is all part of an organised criminal network worth millions of pounds.

"Every town and city will have a retailer which is selling stolen phones, many of which are smuggled out of the country and sold for big profits. Phones abroad are not subsidised. In Iraq, for example, a new phone can cost £500, so a briefcase of stolen mobiles can be worth a lot of money."

The theft of mobile phones is partly to blame for the big rise in muggings, with half of all street crime across the country involving the theft of a handset.

Mobile phone owners are urged to register phones free at www.immobilise.com.