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The UN's health agency advised 'pragmatic' measures to reduce exposure, such as using hands-free kits and texting instead of calling.
The disturbing report marks the first time the WHO has linked mobiles with cancer, and follows earlier research linking just half an hour's use a day with up to 40 per cent higher odds of brain cancer.
However the mobile phone industry was quick to point out that the devices had not been directly shown to cause cancer.
More than 70million mobile phones are now in use in Britain - more than one for every man, woman and child. Worldwide, the total tops five billion.
Dr Christopher Wild, director of the WHO's International Agency for Research on Cancer, said: 'Given the potential consequences for public health, it is important that additional research be conducted into the long-term, heavy use of mobile phones.
'Pending the availability of such information, it is important to take pragmatic measures to reduce exposure, such as hands-free devices and texting.'
IARC's conclusion follows a week-long review of all available scientific evidence by 21 scientists from 14 countries, including fresh research that has yet to be published.
The working group concluded that mobile phone use is 'possibly carcinogenic', a term which places the phones in the middle of five tiers of possible carcinogens.
They are below smoking, asbestos, sunbeds and other things which definitely cause cancer, but still a potential risk.
The review's results could lead to the WHO redrawing its guidelines on mobile phone use. Until now, it has stated that there are no adverse health effects associated with it.
Dr Jonathan Samet, chairman of the working group, said while the evidence is still accumulating, it is strong enough to support the classification.
He added: 'The conclusion means that there could be some risk and therefore we need to keep a close watch for a link between cell phones and cancer risk.'
The working group did not quantify the risk - but pointed to a study from last year that linked just half an hour of mobile phone use a day for ten years with an increased use of glioma, a type of brain tumour.
Some of the scientists behind that research said the figures were flawed and urged people not to worry, but others warned against dismissing the link.
Professor Denis Henshaw, a Bristol University radiation expert, said at the time: 'Why should it come as a surprise that pressing mobiles to people's ears increases the risk of brain tumours?'
The new review also found a possible link between mobile phones and non-cancerous tumours of the nerve that transmits information about sound from the ear to the brain.
'Children should only use mobile phones for essential purposes and keep all calls short.'
Mobile Phone Do'sThe safety risks of mobile phones is a matter of constant contention between scientists and grave concern for consumers.
Mobile Phone Don'ts
- Keep your mobile phone in your bag rather than in your pocket or next to your body. One study shows that men who wear cell phones near their groin risk reductions in their sperm count by up to 30 per cent.
- Send text messages or email where possible - don't lean it against your body as you do so.
- Use a wireless headset. Moving your phone 20cm away from your head reduces radiation doses by about 98 per cent
- Keep still when you're using it. If you're on the move, whether walking or in a vehicle, your phone needs to use more radiation to keep track of you.
- Hold it away from you after dialling and watch the screen to see when it connects. Most phones emit more radiation when they're trying to make contact.
- Go low-tech. The more sophisticated functions your phone has, the more power it must use to complete tasks.
- Talk for hours on end. The longer you use the phone, the higher a dose of radiation your brain is soaking up. Even a two-minute call has been found to alter the natural electrical activity of the brain for up to an hour afterwards.
- Use a regular wired headset, like the one that came with your phone. The regular wired headset has been found to intensify radiation into the ear canal.
- Allow your children unlimited mobile phone use. Young brains encased in thinner, more fragile skulls risk greater damage
- Do not make a call when the signal strength is one bar or less. The phone must work harder to establish a connection.
- Use the cell phone in enclosed metal spaces such as vehicles or elevators, where devices may use more power to establish connection. The metal enclosure also acts as a Faraday cage that traps the radiation and reflects it back on to the occupants.
Just a fortnight ago an influential Council of Europe committee warned mobile phones and wireless internet should be banned from schools because they pose too great a risk to children's health.
The Council's Committee on the Environment, Agriculture and Local and Regional Affairs drew up a draft resolution urging governments to 'take all reasonable measures to reduce exposure to electromagnetic fields' from mobile phones and similar devices.
In March, in the Government's first update to the UK Mobile Phones and Health leaflet since 2005, officials for the first time warned mobile phone users to text or use hands free kits rather than make calls.
The Department of Health said this would reduce the user's exposure to reduce radiation emitted by the devices.
It stated there had been no 'clear evidence of adverse health effects' from the use of mobiles or from phone masts.
However, it added: 'As people have only been using mobile phones for relatively few years, the HPA advises that more research be carried out, especially to investigate whether there might be longer term effects.'
The UK Chief Medical Officer restated previous advice that children under the age of 16 should only use mobile phones for 'essential purposes' and should 'keep calls short.'
This was described as a 'precautionary' move as teenagers' bodies and nervous systems are still developing.
But a month earlier a University of Manchester study found there was no link between mobile phone use and increased levels of brain cancer.
A study by scientists at the university looked at data from the Office of National Statistics on rates of newly diagnosed brain cancers in England between 1998 and 2007.
It found no statistically significant change in the incidence of brain cancers in men or women during the nine-year period.
Lead researcher Dr Frank de Vocht, an expert in occupational and environmental health in the University of Manchester's School of Community-Based Medicine, said a cancer epidemic was unlikely.
He said: 'Our findings indicate that a causal link between mobile phone use and cancer is unlikely because there is no evidence of any significant increase in the disease since their introduction and rapid proliferation.'
But at the end of 2010 a startling survey warned pregnant women who regularly use mobile phones could increase the risk of their children behaving badly.
If their offspring then start using the devices at an early age, the chance of problems climbs to 50 per cent, according to findings published in the Journal of Epidemiology and Community Health.
Researchers in California found those exposed to mobile phones in the womb had a 30 per cent rise in behavioural difficulties at the age of seven.
But those exposed before birth and in their childhood, were 50 per cent more likely to have behavioural problems than those exposed to neither.
Children who used mobiles, but were not exposed in the womb, were 20 per cent more likely to display abnormal behaviour.
These latest studies have just contributed to a contradictory canon of research into mobile phone safety.
References: ElectromagneticHealth.org Details Health Damages from Cell Phones and EMF
I think perhaps some people will need a surgeon to remove the cell phone from their head. Several drivers violating the rules of the road, thankfully I drive defensively and was able to avoid them, all had cell phones stuck to the head. What are they all chattering about? What did they do before cell phones? I visited a local friend last night after not seeing him since before Christmas. He explained to me that he had been in two accidents in the last month, both at the same stoplight, he was stopped both times, a cell phone yaker plowed into his stopped car each time. I don't think these idiots will live long enough to get cancer, however, I fear they will take some of us with them.