Latest Home Office data reveals that just 16,900 drivers were handed fixed penalty notices in relation to the offence in England and Wales last year, compared with 123,100 in 2011.
The 2015 figure represents a 43 per cent decrease on the previous 12 months.
Pete Williams, the RAC's road safety spokesman, told Daily Express an "epidemic" of handheld mobile phone use has been allowed to "sweep across the country largely unchallenged".
The motoring organisation published the results of a survey of more than 1,700 UK drivers last month which showed that almost one in three (31 per cent) admit to using a handheld phone behind the wheel, compared with just 8 per cent in 2014.
The RAC believes a 27 per cent fall in the number of full-time dedicated roads policing officers in England and Wales (excluding London) between 2010 and 2015 has left drivers with no fear they will be stopped.
Mr Williams went on: "The simple truth is the problem of illegal handheld phone use at the wheel is undeniably getting worse, with fewer and fewer people being caught.
"Law-abiding motorists who regularly see others using a handheld phone at the wheel, putting lives at risk, want to know that the law is being enforced."
Department for Transport figures show that a driver impaired or distracted by their phone was a contributory factor in 492 accidents in Britain in 2014, including 21 that were fatal and 84 classed as serious.
The Government has proposed doubling the punishment for illegal phone use by drivers.
Motorists caught using a handheld phone are currently given three penalty points and a minimum fine of £100, but this is set to be increased to six points and £200 under the plans.
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