Millions of illegal cigarettes seized during raids by police in Wolverhampton, Bristol, Nottingham and Birmingham have been found to contain human faeces, dead flies and asbestos.

The Local Government Association (LGA) says fake cigarettes, traded illegally on the black market in Britain without undergoing the same regulatory procedures as branded cigarettes, pose a serious risk to smokers' health, a fire risk to their homes, damage honest businesses and cost the UK economy around £3bn a year in unpaid duty.

Local councils in the Midlands are attempting to crack down on the illicit trade, which has led to seizures across the region. Sniffer dogs have been deployed in Birmingham during raids on 12 premises in the city this week.

Trading standards officers found fake cigarettes hidden inside vacuum cleaners, under floorboards and in toilet cisterns during the raids.

Some have contained asbestos, mould, dust, dead flies, rat droppings and human excrement. Many feature higher levels of toxic ingredients such as tar, nicotine, carbon monoxide, lead, cadmium and arsenic than genuine cigarettes.

Fake cigarettes also pose an increased risk of fire in homes according to the LGA because they do not include designs that ensure a burning cigarette will extinguish itself if not actively smoked.

Councillor Joanna Spicer, vice chair of the LGA's communities board said: "Counterfeit tobacco being sold cheaply through the black market by rogue traders is hampering council efforts to reduce smoking.

"People buying cheap cigarettes might think they are getting a great deal, but the truth is that they're not. If they knew what they might contain, they might think twice about buying them."