Rabbit numbers are at a 40-year high. Out there in the burrows of Britain are 37.5 million dewy- eyed rodents, and they are breeding like, well, rabbits. Fertile at three months, a doe can produce eight kits every five weeks, all year round. In ideal conditions, two rabbits can become a million in three years.

But then conditions are never ideal. Disease, natural predators and men with guns keep numbers in reasonable check. But every so often populations surge, and this is what is happening now. The Ministry of Agriculture (Maff) puts annual population growth at 2 per cent, and farmers are feeling the brunt of it. "This year the problem is pretty bad," says Graham Tucker, the National Farmers' Union chairman for Huntingdon. "It's so bad, in fact, that they're breeding above ground. All the set-aside land is partially to blame ... We consider them as vermin." Rabbits are costing Alan Stow, a Worcestershire farmer, some pounds 5,000 a year in crop damage; like other farmers he has been forced to call in a gun enthusiast who shoots up to 50 rabbits a night; Maff puts the annual cost of rabbits to agriculture and forestry at pounds 100m.

Shooting is one way of keeping numbers down. Another is blocking up the burrows, filling them with gas and leaving the rabbits to die underground. But the Government has another, more constructive plan: rabbit ranching.

This is the suggestion of a report being drawn up by the Scottish Office. It proposes that wild rabbits be left to breed in enclosures of 200-300 acres, protected from predators. All it would need would be sandy soil and a sound fence. The rabbits would provide cash-strapped farmers with good profits at a minimal investment. For, every so often, the rabbits would be "harvested" for human consumption.

It is hard to see where the plan can go wrong. Rabbits kept in limited numbers do not damage the landscape. They may even be beneficial. There are no sharp hooves to disturb the soil, and their nibbling prevents delicate plants from being swamped by long grass. The advantages of rabbits have long been recognised on chalk downland where their disappearance in the Fifties led to the extinction of the Large Blue butterfly.

The Scottish Office is not the first to think of rabbit ranching. The Normans introduced rabbits from the Mediterranean in the 12th century, and ranching peaked during the 19th century. "Warren" originally meant a walled enclosure where rabbits were farmed for meat, skins and fur. As recently as 70 years ago, these were operating on a huge scale and some covered thousands of acres - for example, 128,856 animals were harvested at Lakenheath, Suffolk, in 1920-21 alone. By 1950, the industry was worth pounds 2bn in modern terms.

Modern-day rabbit ranching could also find favour with the animal rights lobby. Britain already has 1,000 intensive commercial rabbit farms, producing 3,750 tons of meat a year which is mainly sold abroad. The conditions in which the rabbits are kept are comparable to those of battery chickens. The kits are separated from their mothers at three weeks and put in wire cages. Each kit is allowed only six square inches of space. At nine weeks they are slaughtered.

Philip Lymbery, campaigns director for Compassion in World Farming, is a bitter opponent of "battery" rabbit farms. He says their number is increasing alarmingly. Mr Lymbery is initially welcoming of the wild ranching scheme: "We'd have to see the details - how they were killed and so on - but in principle it's a great improvement on battery units."

The author of the report - who wants to remain anonymous - is more cautious about his proposal's reception. "Commercial intensive rabbit farms are already a target of extremists," he says. "In theory, ranching is like free-range versus battery, but it's difficult to predict how activists might react: rabbits are an emotive subject."

And thereby hangs the tale. The budding rabbit-meat vendor has a big problem. The British will barely touch the stuff. Our grandparents were raised on rabbit pie, but in the Second World War it was often the only meat available, and familiarity bred disgust. Along with Spam, it became synonymous with rationing and hardship. Gerry Rofe, a retired rabbit farmer, quotes her mother on the end of rationing:

Rabbit hot and rabbit cold,

Rabbit young and rabbit old,

Rabbit tender and rabbit tough,

Thank the Lord we've had enough.

Rabbit meat might have limped along as the poor man's chicken were it not for myxomatosis, the virus introduced to cure a rabbit plague in 1954. The disease made human disasters such as the Black Death (33 per cent mortality) look mild; the death rate is 199 in 200. Myxomatosis also looks particularly unpleasant: it causes the rabbit's eyes to swell up and seal with pus. All over the country people saw blind, dying rabbits. Although harmless to humans, suddenly few people could bear eating even healthy animals. Myxomatosis is now confined to a few pockets in Britain, but the stigma remains.

And, then there is the Watership Down factor. Man's inhumanity to rabbit in Richard Adams' bestselling novel, coupled with generations of British children reared on Beatrix Potter, means that eating a cousin of the floppy-eared pet in a hutch at the bottom of the garden is thought in seriously bad taste.

Such sentimentality does not exist on the Continent. In France they eat 7 million rabbits a week, one rabbit for every five people. Italians eat 9lb of rabbit each every year, compared with 30oz each here. When we do eat rabbit, we want it shrink-wrapped, skinned, deboned and in chunks. The rest of Europe is less squeamish. According to Tom Wolfe who, as managing director of Buchan Game, exports 10 tons of wild rabbit a year to the Netherlands, his customers prefer the animal unskinned and ungutted.

So, what is the future for wild rabbit meat? Intensively reared rabbit will probably remain as an expensive "speciality" product: for example, at Tesco it sells fresh for pounds 3.89 per lb. Sainsbury alone sells wild rabbit meat, and that only in winter.

"Commercial rabbit is where the money is," says Mick Jones of Midland Counties Rabbits, which supplies Tesco, Asda and Safeway. "Oven-ready wild rabbit fetches pounds 1 a kilo wholesale, while commercial rabbit is worth three times that."

Admittedly, compared with a bland, textureless eight-week-old chicken, wild rabbit is boney and unpredictable. But it is undoubtedly good for us. With at least 27 per cent protein it beats chicken and lamb, and it is low in cholesterol and virtually fat-free. Wild rabbit is also free- range and organic; perfect for the health-conscious consumer.

And the taste is something else. Simon Hopkinson of Bibendum, the London restaurant, and also the Independent's food writer, says it has "hugely more flavour than ordinary rabbit. It's more akin to hare, with a much more gamey, strong flavour. It's delicious. You just have to remember to cook it slowly; it needs to be braised or put in a pie."

The Scottish Office is trusting in European sales to make its project viable. This worries ranching optimists, who are concerned that such a beneficial scheme should be dependent on foreign sales. Instead, they prefer to look at our growing sense of gastronomic adventure. One Sussex farm is selling squirrel meat, Tesco is offering buffalo burgers and Asda has recently announced it will stock ostrich.

It would be ironic if people were to try a kangaroo steak before their first rabbit pie.

We asked London shoppers: would you eat rabbit? Jill Thredder: "I never eat rabbit because my parents lied to me about the pet rabbit I used to have. They told me it had gone to live on a farm where it would be happy when, in fact, it had died. But if I did eat rabbit I would never buy the farmed ones"

Elaine Appleby: "I'm from Lincolnshire and I was forced to eat it as a child - jugged hare, rabbit pie, you name it. I won't touch it now."

Peter Cox, her fiance: "My grand-father used to buy it for his cat, so I've never eaten it. I suppose it's psychological"

Sue Rosser: "I love rabbit, so does my family. I boil it in a big stew with vegetables."

Darko Jovanovic: "I come from Macedonia and had it there only once. My uncle's pet rabbits got out of control, so he killed a lot of them and cooked them for big picnic. I didn't like it much."

Michael Law: "I have never eaten it. I love cooking but I would never cook rabbit. If someone offered it to me on a plate I would try it out of curiosity."