Van drivers wishing to use mobile phones on the move have been forced down the hands-free route after it became illegal to use hand-held units.
This offence now attracts a £60 fine and three licence penalty points.
But the report said it was wrong to assume that hands-free kits were safe and urged Britain’s van fleet operators to instruct staff not to use any phone while on the move.
In the study, 30 volunteers drove an 11-mile route in a simulator.
Those who had conversations using hands-free kits were more likely to miss road signs and an analysis of their conversations showed that their ability to communicate was poorer than when talking to a passenger.
The study concluded: ‘Driving and talking is cognitively demanding and results in poorer driving performance.
Talking on a hands-free phone while driving can result in poorer decision- making.’
TRL said it may be necessary in the future to ban hands-free phone conversations on the move too.
The report was welcomed by the Royal Society for the Prevention of Accidents.
A spokesman said: ‘There is now plenty of evidence to show that it is the conversation itself, not the type of phone, that causes the distraction.’