Drug barons are laundering money by selling software over the internet that unlocks chips on stolen phones.

Home Secretary Jack Straw last week called on manufacturers and the police to help tackle the growing number of street robberies that target mobile phones. According to the British Crime Survey, these are up since last year by 14 per cent to 15,000 phone thefts per month.

However, according to exclusive information received by Network News, the upswing in crime could be caused by the easy availability of phone unlocking software which is being 'marketed' by drug barons.

This software can be downloaded from websites and 'unlocks' the handset from the service provider. The handsets are then sold by organised crime in regions such as China and the Baltic.

A source within the telecoms sector said: "We are led to believe that the people who are running these sites are nasty individuals, who use the sites to launder drugs money."

Network News has passed on this information, including some of the websites, to the National Crime Squad, which said its High Tech Crime Unit would investigate the matter.

Mark Nicholas, from the property crime section of the Home Office, said he expected that this type of information would be exchanged between Straw, industry and the police. "This is one of the things that would come out of the meeting," he said.

Greg Smith, chairman of the fraud and security group of the Communications Management Association, said that the CMA welcomed the Government's initiative and was looking to see "what security measures it would recommend to prevent and reduce theft".

BT Cellnet said that Jack Straw should not imply that the industry was not doing enough. A company spokesman said: "The industry is already taking phone theft seriously and cannot be held responsible for street crime."

First published in Network News