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Customs officials have seized 11.6 tonnes of loose tobacco and uncovered a suspected "illicit" cigarette factory in Camlough, County Armagh.

They also found almost 1.7m branded cigarettes as well as equipment capable of producing "millions" more including tobacco shredding, cigarette rolling and packaging equipment.

Filter rods for 3.24m cigarettes were found at a second site in Silverbridge.

The items seized were worth an an estimated £8.3m in lost duty and taxes.

The searches were carried out on Thursday by HM Revenue and Customs (HMRC) investigators, accompanied officers from the Police Service of Northern Ireland (PSNI).

HMRC said if the factory had gone undetected, it was capable of producing more than 390m cigarettes a year, cheating the taxpayer out of more than £160m in lost duty and taxes.

"Cheap cigarettes come at a cost as they often fund organised crime and other illegal activity that causes real harm to our communities," said Steve Tracey, assistant director of HMRC's Fraud Investigation Service.

"The sale of illegal tobacco will not be tolerated by us or our Organised Crime Task Force (OCTF) partner agencies and disrupting criminal trade is at the heart of our strategy to clampdown on the illicit tobacco market, which costs the UK around £1.9bn a year.

"This is theft from the taxpayer and undermines legitimate traders."

In addition to the items found at the Camlough factory, investigators seized filter rods for approximately 615,000 cigarettes.

HMRC added: "Investigations into the suspected fraud are ongoing."