Part of Manchester has been nicknamed “Counterfeit Street” because of the widespread sale of fake goods there.
A report by the Intellectual Property Office (IPO) said items worth £1m were seized in Cheetham Hill, in 2013.
Fake clothing, footwear, hoverboards and cigarettes have all been seized in the area.
Intellectual Property Minister Baroness Neville-Rolfe said she had raised concerns about the “counterfeiting hotbed” that continues to thrive there.
She told the BBC the area is “almost like the counterfeit capital of the UK” and added it was a “national problem.”
“What was a localised problem has become a more serious national problem.”
She said sometimes the goods are unsafe and they have picked up some dangerous hoverboards which could be lethal, and fake alcohol that “could kill”.
She said there would now be a concerted effort to disrupt the activity of crime groups..
The IPO report said the concentration of counterfeiters in the area has “negative consequences for the local community and economy, as well as the harm of associated criminality such as money laundering, organised crime group involvement, drug dealing and violence”.
Baroness Neville-Rolfe said: “This trade, where income tax and consumer safety is simply ignored, undercuts and undermines legitimate businesses and allows other criminality to be funded and flourish.”
She said the report “signals the start of a concerted effort to disrupt and dismantle organised crime groups operating in nationally significant trade”.
The government-funded Police Intellectual Property Crime Unit (PIPCU) which has specialists in counterfeit crime has been given £3m by IPO.
“Despite these efforts, the problem is so ingrained in the fabric of everyday life in the area that the problem persists, with the businesses often operational again within days of action being taken,” she added.
The thriving clothing trade in the area is a “front for criminal sales of counterfeits,” according to the report.
It said: “Amongst law enforcement, rights-holders and in the media, Cheetham Hill is anecdotally referred to as ‘Counterfeit Street’.
“It is indicative of the entrenched criminal culture of the area that the trade in counterfeit goods has continued despite regular enforcement action and high-volume seizures.”
But Councillor Nigel Murphy, Manchester City Council’s executive member for neighbourhoods, said: “Our trading standards officers have been working closely with Greater Manchester Police and other agencies to crack down on counterfeiting in Cheetham Hill for a number of years, and we have seized huge amounts of counterfeit items.
“However, the scale of these criminal operations, and the fact that counterfeiters are also involved in a range of other criminal activities, means that a more co-ordinated approach is needed to deal with the issue.”
The report stated “no single agency” can tackle the problem.
Mr Murphy added: “I welcome that the government has recognised this issue and look forward to our officers working as part of a wider partnership to tackle the counterfeit trade.”
Nationally, there were 75,000 counterfeit goods seized in 2014/15 with an estimated retail value of £2.5m.