Illegal drugs can be harmless and should no longer be "demonised", a wide-ranging two-year study concludes today.
The report says Britain's drug laws are "not fit for purpose" and should be torn up in favour of a system which recognises that drinking and smoking can cause more harm.
The RSA Commission on Illegal Drugs, set up in January 2005, also called for the main focus of drugs education to shift from secondary to primary schools and recommends the introduction of so-called "shooting galleries" - rooms where users can inject drugs.
The report, compiled by a panel of academics, politicians, drugs workers, journalists and a senior police officer, also calls for the Home Office to be stripped of its lead role in drugs policy.
It recommends that the Misuse of Drugs Act be scrapped in favour of a wider-ranging Misuse of Substances Act abandoning the current ABC classification system in favour of an "index of harms".
The system, it says, is "crude, ineffective, riddled with anomalies and open to political manipulation", while existing drugs education is often "inconsistent, irrelevant, disorganised" and "delivered by people without adequate training".
Current laws, the panel claims, have been "driven by moral panic" with large amounts of money wasted on "futile" efforts to stop supply rather than going after the criminal networks behind the drugs on British streets.
At the heart of the report is a call for an end to what the panel call the "criminal justice bias" of current policy in favour of an approach treating addiction as a health and social problem rather than simply a cause of crime.
The report, which aims to influence a Government review of drug strategy next year, also calls for jail sentences to be given for only the most serious drugs-related crimes and for addicts to be given jobs and housing as part of treatment.
It also recommends wider access to treatment such as prescription heroin.
The report is likely to spark fierce controversy.
Former Conservative leader Iain Duncan Smith described it as "worryingly complacent" and accused the members of the commission of failing to do their homework.
But commission chairman Prof Anthony King of Essex University said: "Current policy is broke and needs to be fixed."
Setting out its terms of reference, the report says: "The idea of a drugs-free world, or even of a drugs-free Britain, is almost certainly a chimera."
It goes on: "The use of illegal drugs is by no means always harmful any more than alcohol use is always harmful.
"The evidence suggests that a majority of people who use drugs are able to use them without harming themselves or others.
"They are able, in that sense, to 'manage' their drug use... The harmless use of illegal drugs is thus possible, indeed common."
Calling for the concept of drugs to be extended to take in alcohol and tobacco, the report says: "Unlike most other such substances, however, illegal drugs have been demonised - by politicians, by the media and to some extent by the general public."
Describing the drugs trade as a business, the report says: "In an ideal world, it might be desirable to halt altogether the importation of illegal drugs into this country and the production of them within this country.
"In an ideal world, it might also be desirable to halt their distribution and sale in this country.
"None of these things, however, is possible and at the moment large amounts of money are wasted in attempting to achieve the impossible."
It goes on: "The law as it stands is not fit for purpose."
Describing the Misuse of Drugs Act as unwieldy and inflexible, the report says: "It sends people to prison who should not be there.
"It forces people into treatment who do not need it (while, in effect, denying treatment to people who do need it)."
While the report does not call for decriminalisation, it questions the idea of total prohibition.
"Drugs policy should, like our policy on alcohol and tobacco, seek to regulate use and prevent harm rather than to prohibit use altogether," the report concludes.
Mr Duncan Smith, chair of the Conservative Social Justice Policy Group, said: "I find this report worryingly complacent.
"Drug abuse in the UK is a serious and growing problem, wrecking the lives of 325,000 adult problem drug users and blighting the lives of many more people, be they family or friends or the victims of drug-related crime.
"I find it most disappointing that the RSA report appears to endorse the failed harm reduction strategy of recent years and to ignore extensive evidence that residential rehab can lead to full recovery from drug addiction.
"The RSA has also failed to do its homework by not surveying the views of drug addicts - who want recovery and drug-free lives - not managed dependency on methadone.
"Nor has it looked abroad to the treatment programmes of countries such as Sweden and Holland, where levels of drug abuse are much lower than the UK."
A Home Office spokesman said: "The Government's Drug Strategy has been a success and significant progress has been made in tackling drug misuse.
"Since 1998 the Government has invested unprecedented sums in tackling drugs, given greater powers to the police and delivered pioneering education campaigns to young people.
"This has delivered results. Record numbers of people are now entering and staying in treatment, Class A drug misuse among young people has stabilised while the use of other illegal drugs has fallen and drug-related crime is down.
"Tough legislation and enforcement, backed by treatment and education, delivered by hardworking and committed front line staff from a wide range of organisations and agencies, including the police, is the reason for the success of the drug strategy.
"We are not complacent, however, and we will continue to look to improve our work in this area wherever we can."
* The RSA is the Royal Society for the encouragement of Arts, Manufactures and Commerce.Reuse content