The cell phones feature logos from brands including BMW, Volkswagen, Bentley, Audi and Porsche.
The UK government is considering banning tiny mobile phones which resemble car key fobs.
A spokesman for the government told the BBC that the issue was being discussed with the National Trading Standards Board and the Serious Organised Crime Agency.
The cell phones are said to feature logos from brands including BMW, Volkswagen, Bentley, Audi and Porsche.
The UK’s Society of Motor Manufacturers and Traders spokesman said they were of the belief that the devices were being made without permission from its members.
A prison service spokesman was quoted by the BBC as saying that a range of techniques – including body orifice security scanners and high-sensitivity metal detectors – led to the seizure of over 7,000 phones and sim cards in prisons in England and Wales in 2012.
"We’re now working closely with the Serious Organised Crime Agency and Trading Standards to remove these small mobiles from sale in the UK, as well as legislating to block phone signals in prisons," he said.
According the POA, a prison officers’ trade union, its members were also worried that the gadgets could lead to more phones being smuggled into prisons.
"The latest key fob mobile phone has the potential to increase the number of mobiles in prisons simply by the nature of the design and size," it added.
"The POA believe all prisons should have blockers installed and prisoners found in possession of a mobile phone should be prosecuted."