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It has warned the long-term appeal and economical potential of the historic thoroughfare faces “destruction” due to the domination of gift and souvenir shops, a loss of local character, dwindling numbers of permanent residents and over commercialisation.

The Edinburgh World Heritage (EWH) trust has recommended the creation of a ‘Made in Scotland’ scheme and a review of enforcement measures to help tackle misleading advertising and claims over products being sold on the Royal Mile.

Surveys of more than 500 visitors found they were far more likely to feel “surrounded by foreigners” than “hear Scottish accents” on the Royal Mile.

The findings, which are expected to help influence a new tourism strategy for the city, have emerged weeks after Edinburgh was named with Amsterdam, Rome, Venice and Barcelona as one of the world’s worst hotspots for “overtourism”.

The research, which also involved interviews with nearly 50 Royal Mile shop workers, revealed many visitors were either “frustrated or misled” in efforts to buy “high-quality authentic products”.

Concerns have been raised about damage being done to the historic environment by climate change, traffic congestion and soaring visitor numbers.

The EWH research found that footfall to the Royal Mile was driven by its historic character and visitor attractions, rather than its retail offer.

It states: “This underlines the crucial importance of the ongoing high-quality conservation and maintenance of buildings and public realm in the area, as well as the need for sensitive, high quality new development if required.

“Our research also indicates the Royal Mile is losing its local character. Our survey shows that people associate their visit more with attributes such as ‘being surrounded by foreigners’ than with ‘hearing local Scottish accents’. This suggests it is at risk of becoming a tourist ghetto, which will certainly detract from its long-term appeal and economic potential.

“When asked to name aspects of the Royal Mile which are not authentic, the overwhelming majority of comments concerned the retail sector, more specifically the gift and souvenir shops which dominate the landscape.

“Our research among shop assistants suggests visitors’ desire to purchase high quality authentic Scottish products is frustrated by businesses selling lower-quality mass produced items, who ‘push the boundaries’ in terms of claims concerning Scottish production.”

EWH director Adam Wilkinson said: “These findings have confirmed what many of us have suspected: that the Royal Mile area risks becoming a tourist ghetto, and that the retail environment is to some extent detracting from its appeal.

“We look forward to working with our partners on a range of actions to secure the long-term success and resiliency of the street.”

Neil Gardiner, planning convener at the city council, said: “We all share an ambition to protect and enhance the Old Town’s heritage.

“This timely piece of research underlines the importance of the Royal Mile – both as a distinctive place to visit and a unique area to live or work.

“Healthy high streets need new businesses to open and new residents to move in and, to encourage this, the council is developing plans to reduce the dominance of car traffic as well as seeking powers to control short-term lets.

“This should help the Royal Mile to be even more people and environmentally friendly, strengthening residential communities and further enhance our pedestrian friendly public realm.

“We would also support a voluntary authentication scheme for businesses selling genuine Scottish products, as well as initiatives to widen the range of goods on offer including links to Edinburgh designers and craftspeople.

“The built landscape of the Royal Mile is like no other and is of crucial importance to Edinburgh’s identity.

“Not all of the ideas raised by this report will be immediately feasible but others will and I’m glad to see such a debate being had.

“It is in all of our interests to see the Royal Mile keep and enhance its authenticity and for the area to meet the needs of current and future residents, as well as visitors.”

Simon Cotton, managing director of Johnstons of Elgin, said: “The Royal Mile is a crucial market-place for the Scottish textile industry.

“We welcome the findings of this research, in particular recommendations to better meet the needs of visitors who want to buy high-quality products manufactured in Scotland, and to address misleading sales approaches.

“It’s in all our interests to ensure that the Royal Mile remains an outstanding visitor attraction.”

The new research has emerged months after an official report on the future of tourism in Edinburgh warned that “collective intervention” was needed to preserve the city’s history, heritage and built environment and the “feeling of authenticity” in the Old Town, as well as protect the quality of life for local residents.

The study for the Edinburgh Tourism Action Group (ETAG) warned the industry against possible “complacency” over the impact of further growth in the next decade.

The number of overnight stays has increased by nearly a third since 2010, with the city attracting an extra 750,000 overseas visitors. However there are already plans to further increase the number of hotels by a third.

A new campaign, Citizen, was launched earlier this year to “defend” Edinburgh against over-tourism, gentrification, privatisation of public space and the impact of its festivals.

Spokesman Mike Small said: “This new report just confirms what Citizen - and residents of the Old Town - have been saying for some time: that the overtourism of Edinburgh is running riot in an orgy of profiteering.

“The result is a hollowed-out cultural experience which is full of short-term money and long-term decline. This is a report which is the result of neglect.

“Edinburgh is the city of capital not the capital city. This can’t go on.”

A spokeswoman for ETAG said: “ETAG and its members are conscious of the need to continue to ensure a great visitor experience for anyone who visits our city. We’re working with partners and stakeholders on a new strategy, which aims to ensure tourism is managed in a sustainable way, balancing the needs of residents, businesses and visitors.”

Gordon Robertson, chairman of Marketing Edinburgh, said: “The report by Edinburgh World Heritage makes some very sensible recommendations.

“The time is now to make changes that would avoid any potential for the Royal Mile and its immediate environment to further erode the very thing that draws visitors and locals to this historically important area of the city.

“We all acknowledge that there are issues, but the city has it within its gift to address them and current discussions around the future management of the city, of Marketing Edinburgh’s role and the Edinburgh 2030 tourism strategy are the best place for this robust debate.”

Heritage body warns Edinburgh’s Royal Mile is at risk of becoming ‘tourist ghetto’