A report that sparked a public health scare about children who use mobile phones has come under fire from insurers.

The report claimed to have found evidence that mobile phones could damage children's health. Product liability insurers said the scare was exaggerated in the national press.

"What the report actually said is that a non-fatal and extremely rare tumour might be developed by children who use mobiles over a long period of time," said a senior insurance source.

"The tumour would only affect four in 100,000 children, so it would be impossible to say that it is going to affect product liability premiums.

"As with most new technological products it is impossible to know the long-term effects and we are aware of the risks involved."