A simple and novel method for production of metal clusters as building blocks for nanoscale devices is presented. With this procedure, called the gas / cluster aggregation method, a wide range of clusters may be synthesised and, more important, these clusters may be subsequently modified and functionalized in-situ by adding atoms/molecules of different nature, on the surface of readily formed clusters. The cluster size is extremely well controlled by the vapour pressure of the picked-up species. Moreover, the method is versatile, since it allows multiple pick-up processes within the same rare gas cluster for producing, for example, core-shell nanoparticles with metal core and non-metallic shell or vice-versa, nano-onions, with different species successively attached to the surface of the initial picked-up cluster, and so on. Initial formation of Fe gas-stabilised clusters and core-shell nanoparticles with Fe core and Fe oxide shell, as well as their structure and morphology, are presented and discussed. The core-shell nanoparticles show incipient self-organization into hexagonal cluster superlattice. Structural, magnetic and Mossbauer spectroscopy investigations have been performed on the Fe cluster samples. The magnetic properties of supported Fe clusters show marked differences compared to the bulk. A small hysteresis is observed in the parallel applied field while in the perpendicular case, lack of saturation at the highest applied field is noticed. Such behaviour has been also observed in FeRh [1] and AgCo [2] bimetallic nanoparticles. This behaviour marks the occurrence of a strong planar magnetic anisotropy in the sample and may also be a consequence of increased surface spin disorder and finite size effects, which are typical for nanoparticles in the reported size range.