Tougher licensing is needed to combat pirate radio stations that interfere with emergency services' communications, according to Ofcom.
A detailed study by the media regulator suggested that illegal broadcasting is a "serious issue" that needs a new system of enforcement through the courts.
However, the research found that pirate radio is frequently popular with listeners, and that 16 per cent of adults in Greater London regularly listen to illegal stations.
Ofcom concluded that some stations should be licensed while others are closed down, and will consult on the issue later this year.
Ofcom carried out more than 1,000 raids on pirate stations last year, resulting in 63 convictions.
The London boroughs of Hackney, Haringey and Lambeth have the highest concentration of illegal stations.
Forty per cent of London radio listeners say they have experienced interference on their radio, and 27 per cent blame it on pirate stations.
Almost two-thirds of all UK radio listeners turn off their radios or change station when they encounter interference.
Six out of 10 London listeners expressed concern when told that pirate radio could disrupt communications technology used by the emergency services.
Illegal broadcasters transmitting in the FM band cause interference to the systems of services including the fire brigade and air traffic control, as well as to legitimate licensed radio stations.
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