LONDON (Reuters) - In Russia, a music fan can buy every song pop singer Elton John has ever recorded on one CD.

No mean feat since the British superstar never released such a collection. It's one of 1.8 billion pirate recordings sold each year, many by organized crime syndicates branching out into music from the money laundering and drug smuggling industries.

According to a report on Tuesday by the International Federation of the Phonographic Industry (IFPI), music piracy is on the rise and was worth $4.2 billion in 2000. One in three of all cassettes or CDs sold each year are illegally produced.

"Piracy is rising alarmingly in our established markets, and the two main reasons are the proliferation of new, cheap technologies for illegal commercial copying and inadequate enforcement by governments," IFPI Chairman and CEO Jay Berman told a press conference.

The London-based IFPI represents the interest of more than 1,400 record producers and distributors in 76 countries. It aims to fight music piracy and to lobby for fair market access and good copyright laws.

Record companies say the scam has shrunk the industry and will lead to less money being spent developing new artists.

"The record companies will reduce their rosters...(piracy) is drying up the investment pool for new music. I have not heard of any new bands being produced by pirates," Berman said.

Fighting piracy on the Internet -- a "100 percent pirate medium" -- was a growing priority, Berman said. The IFPI is promoting Songbird, an anti-piracy software tool, that enables artists and musicians to track down who has done what with their compositions on song-swap Web sites such as Napster.

"Fighting the Internet pirates, who build their business by offering recordings free, with no respect for the artist, the producer or the music, is a critical part of the move to a legitimate online music market," he said.

The reports names China, Russia, Mexico, Brazil and Italy as its main targets to fight domestic piracy though countries in southeast Asia and eastern Europe, particularly Ukraine, are the main manufacturers and exporters of pirate product.

Iain Grant, head of IPFI's anti-piracy enforcement unit, said a recent trip to a Mexico City's vast Tepito market illustrates the scale of the problem in the developing world.

"In that huge market, I did not see one single legal industrial CD on sale. They were all pirates. The scale is incredible," Grant said.

In fact, the CD vendors in Tepito recently awarded singer Luis Miguel, Mexico's answer to Elvis Presley, Frank Sinatra and Michael Jackson, one prize he could do without -- a plaque for being the best-selling pirated artist.