Dusk falls and the elver poachers appear. They set up their equipment in the mud and then simply wait for the tide to rush in, bringing with it thousands of tiny juvenile eels.

Within an hour one net may have captured 15kg (33lb) of elvers, a wriggling mass worth more than £3,000. "Not bad for a few hours work, is it?" said Richard Dearnley, an Environment Agency fisheries officer .

The agency says it has seized a record number of illegal nets in the Somerset Levels, one of the UK's main eel habitats, and hints that it may use a new law to close some fishing areas next year if the problem continues.

It claims a disturbing trend this spring has been an unprecedented increase in the use of flow nets – traps up to 18 metres long that look a little like wind socks and are tethered to the bank with strong ropes. Elvers and other marine life are funnelled into one end of the net, making them easy to collect, but they can be crushed by the power of the tide that helps propel them up the rivers.

The Environment Agency claims the practice is unfair on eel fishermen who use legal hand-held dip nets – a little like a larger version of a child's rock-pool net –and also puts at risk the future of the European eel, the population of which has declined by as much as 95% in the past 25 years.

Dearnley took the Guardian to one of the eel poaching spots, the River Parrett at Dunball, near Bridgwater. More than 50 illegal nets have been seized from poachers on the Parrett and 10 people have been reported and may face court proceedings. Thirty of the nets confiscated were flow nets.

"This type of net is indiscriminate and an unsustainable method of fishing," Dearnley said. "It's hard work but it pays well. Elvers and any other fish caught in them usually end up crushed in the end of the net." Dearnley said there were two niche but lucrative markets. Some elvers are sent to the far east, where they are considered a delicacy; others are bought by dealers who sell them on in various European countries where they are used to restock depleted rivers or in eel-farming enterprises.

"The law-abiding elver fishermen on the Parrett are rightly upset by those who choose to flout the law and set illegal nets. Their behaviour removes fish from the river that could be caught legally. It undermines this historic elver fishery," said Dearnley.

He argued there was no reason why the fishery on the Parrett and the Severn could not be sustainable. Because the rivers have large tidal ranges there is a greater number of eels arriving than in other areas. "But at the moment the poaching is making it unsustainable."

The dealers may also find themselves short-changed. Poachers sometimes leave the flow nets in place for two or three days. The elvers can survive (though the other fish do not) for that time but often die later after they have been sold on.

There are problems in eel fisheries in other areas, the Environment Agency says, but the Parrett seems to be a particular magnet for poaching. "A lot of the locals that have fished here would try to chance their arm to catch more than by using legal methods. Historically they always have tried to bend the rules." The increase in eel poaching echoes the rise in sheep rustling and other thefts from the countryside highlighted by farmers' representatives and police this week.

Dearnley suggested action could be taken next year (the legal elver season on the Parrett has just finished). New powers under the Marine and Coastal Access Act 2010 make it possible for the fishery to be closed.

Legitimate elver fishermen would resist such a move. One, who asked not to be named (even legitimate eel hunters tend to be very private), said: "That would seem like a very big hammer to crack a small nut. The Environment Agency should do more to clamp down on the poachers, not deprive us all of a living. Eels have been fished here for generations. It's a shame to lose all that history."

From the Sargasso Sea to the flatlands of England

The eel remains one of the world's most mysterious creatures. It is generally accepted now that European eels, Anguilla anguilla, are born in the Sargasso Sea near Bermuda. As leaf-like larvae they are swept by the Gulf Stream towards Europe, a journey that may take a year. When the larvae reach the continental shelf they change into "glass" eels and in the spring begin to move through estuaries and into fresh water. The animals develop pigmentation, at which point they are known as elvers and are similar in shape to the adult eel. Elvers continue to move upstream and again change colour to become "brown" or "yellow" eels. When the fish reach full maturity – some can live to 40 and grow to a metre long – they migrate back to the ocean. Females are reported to carry as many as 10m eggs. They return to the Sargasso Sea, spawn and die.