MUNICH/AMSTERDAM (Reuters) - Radio waves from mobile phones harm body cells and damage DNA in laboratory conditions, according to a new study majority-funded by the European Union, researchers said on Monday. The so-called Reflex study, conducted by 12 research groups in seven European countries, did not prove that mobile phones are a risk to health but concluded that more research is needed to see if effects can also be found outside a lab.

The $100 billion a year mobile phone industry asserts that there is no conclusive evidence of harmful effects as a result of electromagnetic radiation.

About 650 million mobile phones are expected to be sold to consumers this year, and over 1.5 billion people around the world use one.

The research project, which took four years and which was coordinated by the German research group Verum, studied the effect of radiation on human and animal cells in a laboratory.

After being exposed to electromagnetic fields that are typical for mobile phones, the cells showed a significant increase in single and double-strand DNA breaks. The damage could not always be repaired by the cell. DNA carries the genetic material of an organism and its different cells.

"There was remaining damage for future generation of cells," said project leader Franz Adlkofer.

This means the change had procreated. Mutated cells are seen as a possible cause of cancer.

The radiation used in the study was at levels between a Specific Absorption Rate (SAR) of between 0.3 and 2 watts per kilogram. Most phones emit radio signals at SAR levels of between 0.5 and 1 W/kg.

SAR is a measure of the rate of radio energy absorption in body tissue, and the SAR limit recommended by the International Commission of Non-Ionizing Radiation Protection is 2 W/kg. The study also measured other harmful effects on cells. Because of the lab set-up, the researchers said the study did not prove any health risks. But they added that "the genotoxic and phenotypic effects clearly require further studies ... on animals and human volunteers."

Adlkofer advised against the use of a mobile phone when an alternative fixed line phone was available, and recommended the use of a headset connected to a cellphone whenever possible.

"We don't want to create a panic, but it is good to take precautions," he said, adding that additional research could take another four or five years.

Previous independent studies into the health effects of mobile phone radiation have found it may have some effect on the human body, such as heating up body tissue and causing headaches and nausea, but no study that could be independently repeated has proved that radiation had permanent harmful effects.

None of the world's top six mobile phone vendors could immediately respond to the results of the study.

In a separate announcement in Hong Kong, where consumers tend to spend more time talking on a mobile phone than in Europe, a German company called G-Hanz introduced a new type of mobile phone which it claimed had no harmful radiation, as a result of shorter bursts of the radio signal.