Councils have called for licensing powers to tackle "lawless" shisha bars that flout smoking and fire safety laws.
The Local Government Association (LGA) said it was struggling to regulate some persistent rogue premises that disregarded smoking and fire safety regulations.
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A shisha cafe owner was ordered to pay £2,255 after customers were caught smoking indoors on two separate visits by enforcement officers from Redbridge Council, and the owners of two shisha cafes were ordered to pay a total of £2,900 after customers were found smoking in substantially enclosed areas following a prosecution by Bolton Council.
Council leaders said shisha was also often imported illegally and sold without duty, while the ownership of premises was often secretive, hindering the ability of councils and police to take effective action against them.
The number of shisha bars has more than trebled in recent years, with more than half of councils now having a bar or cafe open in their area.
Shisha premises that illegally allow indoor smoking or allow those under 18 to smoke the flavoured tobacco can currently be prosecuted using smoke-free laws.
But the LGA said prosecutions were taking up to a year and bar owners were increasingly undeterred by one-off fines of up to £2,500.
This had left councils struggling to regulate persistent offenders who could easily reopen shisha cafes under a new name, it said.
The LGA is calling for the Government to modernise the list of activities councils can "opt-in" to licence.
Councils could then vet licence holders in advance of premises opening, more easily monitor shisha bars and cafes for harmful activity and seize equipment or revoke licences for repeat offenders breaching licensing conditions or breaking the law.
Licensing powers would also strengthen the ability of town hall public health teams to ensure owners work with them to educate customers about the misconception that smoking shisha is safer than smoking cigarettes, the LGA said.
The British Heart Foundation advises that shisha tobacco contains cigarette tobacco and therefore nicotine, tar, carbon monoxide and heavy metals such as arsenic and lead.
As a result, shisha smokers are at risk of the same kinds of diseases as cigarette smokers - such as heart disease, cancer, respiratory disease and problems during pregnancy.
Simon Blackburn, chairman of the LGA's Safer and Stronger Communities Board, said: "The growing popularity of shisha bars and the lawless way some of them are being run exposes the loopholes that exist in our out-dated and inflexible licensing system.
"Smoke-free laws are not offering strong enough punishments to deter irresponsible shisha bar owners who are making lucrative profits, which means councils often need to carry out costly and lengthy investigations to take action against the same bar over and over again.
"We would always rather work with shisha bars to ensure they operate legally rather than prosecute them, but cafe owners are more likely to obey the law if they knew they might lose their licence."