A new criminal offence should be created to tackle the growing online market for tools that can turn imitation guns into live weapons, according to the Government's legal advisers.
They argued that the law must respond to the "ready availability", particularly over the internet, of the tools necessary to convert firearms.
A new offence of possessing an article with the intention of using it unlawfully to convert an imitation firearm into a live one should be introduced, the Law Commission said.
The independent body called for an overhaul of the law on firearms, which it said was confused, unclear and difficult to apply.
There are more than 30 pieces of overlapping legislation, some of the key terminology is not clearly defined, and the law has fallen out of step with developments in technology, the commission said.
Professor David Ormerod QC, commissioner for criminal law, said: "The failures in the existing law are causing considerable difficulties for investigators and prosecutors, as well as the licensed firearms community.
"The purpose of our recommendations for reform is to provide immediate solutions to the most pressing problems in firearms law, bringing clarity for those who own and use firearms, and those who investigate and prosecute their misuse.
"We remain of the view that the entire legislative landscape requires fundamental reform and should be codified. In fact, there was overwhelming support for such an exercise and consultees have left us in no doubt that the current law is in need of an overhaul."
In a report following consultation with police, prosecutors and groups representing the licensed firearms community, the commission said there should be single, simple test to determine whether a weapon is lethal, based upon the kinetic energy at which it discharges a projectile.
Weapons that fire above the threshold would be deemed to be lethal and subject to restrictions.
Britain is widely seen as having some of the strictest rules on gun ownership in the world.
To obtain a licence to own or buy a firearm, people have to satisfy their local police force that they do not pose a threat to public safety and have a "good reason" to own the weapon.
This includes organisations such as target shooting clubs, museums and firearms dealers.
Figures released in September revealed that the number of legally owned guns in England and Wales is at its highest level for 20 years.
There were more than 1.3 million shotguns and and 525,125 other firearms covered by licences at the end of March.