Around 30 million one pound coins in circulation are counterfeits, Royal Mint figures show.
The number of counterfeit £1 coins in circulation has doubled, the BBC reports.
According to Royal Mint figures obtained by the broadcaster, around 30 million of the coins are currently fake - around one in 50 of the total. The sharp rise was first revealed when the organisation carried out sampling tests earlier this year.
The counterfeit coins can hit the takings of many traders - including taxi drivers and newsagents - who receive the bulk of their payments in cash. The proportion of fake £1s stood at just one percent when the Royal Mint last undertook a survey in 2003.
Robert Matthews, a coin consultant and the Queen's former Assay master, told the BBC that £1 coins might soon have to be withdrawn from circulation, so bad has the problem become. "In 2004, people started refusing to take the South African five rand coin, due to concerns about the number of counterfeits, and eventually the coin had to be redesigned and re-circulated," he commented.
"Independent surveys showed the number of counterfeits to be two percent - the same as we've got here - and I'm worried that if we're not careful the same thing will happen to the £1 coin."
For its part, the Royal Mint said that there was "a comparatively low incidence of counterfeit coins" in circulation, compared to "international monetary standards".
The current £1 coins were first introduced in the UK in 1983.
