Suppose a friend confessed to you one evening that as a young child she had been abducted by aliens, taken to a mother ship and had probes and other equipment inserted into her vagina as part of an intergalactic breeding scheme. What's more, she had repressed this memory for 20 years; but now, thanks to sessions with her new therapist, she had recovered these early memories of sexual trauma.

You would probably recognise that she was disturbed and unhappy, but it is unlikely that you would instantly accept that the earth was being visited by beings from another world and that this had actually happened to your friend. You would probably be equally sceptical of the literal truth if another friend told you they been raped in a past life by redcoats in 18th-century Scotland, or if they claimed to have recovered vivid and painful memories of ritualistic orgies and sadistic sexual practices conducted by organised rings of Satanists.

Yet were she to say that she had recovered memories that her father had repeatedly abused her since she was in her cot, inserted pens, fingers and vegetables into her vagina and made her regularly perform oral sex on him, you might well believe it was at least a possibility. Even though until this latest therapeutic encounter, your friend had always spoken warmly of her parents.

After all, you might say, we do know that incest happens in the most unlikely families, we know that it has been tragically ignored in the past and now we ought to take people's claims seriously. We also know that our minds push memories that are too much to bear into our unconscious, where they can wreak havoc in our lives until we confront them with the help of a trained therapist. No smoke without fire.

However, the fact that the same trained therapists, using the same battery of techniques, can just as easily produce repressed memories of past lives, alien spaceships, and devil-worshipping orgies as well as long-forgotten scenes involving Daddy's goatish lusts, should have set alarm bells ringing. Until very recently, however, it hasn't; and the result, according to a passionate new book, Victims of Memory: incest accusations and shattered lives, by Mark Pendergrast, has been tragedy on a grand scale.

Pendergrast is himself a "victim of memory". A baby boomer who grew up in the Sixties and was involved in the American anti-Vietnam war campaign, he had two daughters whom he says he brought up in an open, liberal way. However, as adults they went into therapy and some years ago wrote him that dreadful letter, which is often part of the "survivor" process, saying that they had uncovered memories of having been regularly abused as children, and as a result wanted no further contact with him.

The easy and instant reaction in all such cases is "well, he would deny it, wouldn't he," and "even if he didn't actually do anything he must have made them feel uncomfortable and guilty in some way". It is one of the achievements of Pendergrast's massive book (700-plus pages) that starting from such a no-win situation, he compiles a believable and damning indictment of the movement. At the end, even the obvious compromise position - that there may be some cases that are mistaken, but surely many have some truth in them - is no longer tenable.

Just in case you thought this was largely an American phenomenon - always so much more hysterical than us phlegmatic Brits - he makes a very conservative calculation that there are something like 42,500 cases in the UK every year where the main focus is recovered memories. Not only that, but since 1990, when the bible of the movement - The Courage to Heal, by Ellen Bass and Laura Davies - was published in the UK, there have been something like 100,000 cases. A few have come to court, but most involve only private grief: elderly parents plunged into despair, muttering, as one interviewee did, "our lives have totally gone down the toilet".

If you believe, as many do, that they were guilty of something, then maybe that is what they deserve. But, remorselessly, Pendergrast takes the reader through the reasons for believing that the whole exercise is a terrible mistake which may well bring the whole edifice of psychotherapy down with it.

I should stress here that he has no quarrel with cases of remembered abuse - people such as, say, the children or Fred and Rosemary West, or the children "in care" who are in no doubt about what happened to them. They are entitled to every support. What he is talking about is a movement that first emerged in the late Eighties, and, building on the new climate of openness about incest, went one step farther. Anyone who vaguely felt that they had been abused, even if they had no memory of it, almost certainly had been. What's more, people who suffered from an astoundingly comprehensive list of vague physical or psychological ills - restricted feeling in the throat, pelvic pains, headaches, feeling powerless, having trouble expressing feelings, being prone to depression - most likely had been abused as well.

From that starting point, they went into therapy - and surprise, surprise, after being subjected to a range of techniques such as relaxation, visualisation and hypnosis, as well as reading widely about the experiences of other "survivors", they began to produce fragmentary memories of long-forgotten abuse themselves.

Pendergrast takes us effortlessly through a vast literature which shows that a patient's expectations, plus those of the therapists, can combine to produce almost any material you desire. Freudian patients produce Freudian dreams; Jungian patients Jungian ones; memories of aliens, past lives or Satanic groups come tumbling out to order. What's more, all but the most sophisticated therapists are unaware of just how subtle the cues that influence their patients can be. All declare that they have not influenced their patients in any way.

More fatally for the recovered memory movement, and the psychotherapy industry as a whole, is the research about the nature of memory. It was Freud who, based on no empirical evidence, span off the idea that traumatic memories are repressed and produce hysterical symptoms that can only be cured by reliving them. But we now know that memory doesn't work along Freudian lines. People do not repress traumatic events, particularly repeated ones. Survivors of real trauma are all too aware of what they have gone through. They may need help integrating it, but not in recalling it.

Not only that, but memories don't lie about like rolls of film in a bank vault, waiting to be replayed. Instead, memory works far more like the censor in a totalitarian state - constantly editing and updating to fit in with the latest twists and turns of one's personal doctrine. We are endlessly re-remembering our past to fit to the present.

Studies have shown how easy it is to implant false memories depending on how questions are asked. For instance, show people a brief film of an accident, then ask them to describe it. Whether you ask them about the "accident" or the "smash" will affect the number who claim to remember seeing broken glass.

Since the formation of the False Memory Society a few years ago, which makes these sort of points, you might think that such radical objections to the core of psychotherapy might have been taken on board by professionals in the field. But no. When the British Psychological Society - the main professional body for clinical psychologists - polled its members on the topic two years ago, they found that 97 per cent not only believed in recovered memories, but they also thought that claims of ritual Satanic abuse were real too (despite repeated investigations finding no evidence for it); 30 per cent believe that you can't influence patients' memories.

How long the "hear no evil" approach of the supposed watchdog bodies will be able to continue - the Australian Psychological Society is an honourable exception - is uncertain. So long as the material generated in therapy went no further than the consulting room, its content and its literal truth didn't matter. Now, however, the recovered memory movement has brought it into the lawyers' offices and the courts, where the therapeutic notion that symbolic abuse is the same as actual abuse is being increasingly questioned.

The whole sad mess is shot through with ironies: old paternalistic Freud, once the oppressor of women, transformed into a feminist hammer to beat their fathers; the accused parents, often baby boomers who had vowed to get child-rearing right this time; the therapists whose unconditional support of hurt people was making the situation so much worse; and the patients exchanging vague aches and normal disappointments for a broken family, emotional anguish and a new role as a victim.

At the time that Freud was formulating his theories, they were at least more humane than some of the alternatives, which included surgery on the nose or the womb, stretching of the limbs while under anaesthetic and electric shocks. We've dropped some of these: maybe it is time for repression to retire toon

`Victims of Memory: incest accusations and shattered lives', by Mark Pendergrast, is published by HarperCollins, price pounds 14.99