The drivers tout for business, but then refuse to be hired or try to negotiate a price for a ride on Hong Kong Island. Others display their "out of service" signs, but as the night goes on begin negotiating prices with potential customers anyway.

"These taxis from Kowloon are just cruising around Central's nightspots soliciting for customers," a police source said. "Sometimes three or four police officers are needed to move them on. Of course all they do is take a lap around the town and come back around again."

The Transport Department says that legally there is no difference between a Hong Kong or Kowloon taxi. But on Hong Kong Island taxi ranks are designated for each region.

"If there is no such thing as a Kowloon taxi or Hong Kong taxi then why are taxi stands set up in both areas that only cater for one or the other?'' the police source asked.

The source said one solution would be to make Hong Kong Island and Kowloon taxis different colours so customers knew which area they were servicing. In the New Territories taxis are green and in Lantau they are blue.

Problems can also arise when a Kowloon taxi refuses to pick up a drunk customer. If the customer hits the taxi they can get arrested for criminal damage.

"Taxis should be on hire for everyone who hails one, not just for those customers who are looking to go to Kowloon side. It's against the law to refuse a fare," the source said.

The Transport Department said it had been providing separate cross-harbour taxi stands at areas near cross-harbour tunnels since 1995. This was so passengers could save paying the return tolls for using the cross-harbour tunnels.

The department also confirmed that trials of new traffic measures to tackle taxi issues had been carried out in Lan Kwai Fong and the results were being examined.

To help passengers, a cross-harbour taxi stand was now operating in Queen's Road Central near Li Yuen West Street, a short walk from Lan Kwai Fong.