The number of working age adults snorting the class A drug last year hit a 12-year high, with nearly a million confirmed users.
Almost half of those are aged between 16 and 24 - an age group that saw huge growth in user numbers.
There are now around 439,000 cocaine users in their late teens and early 20s, up by 1.5 per cent in just a year.
Drug experts said the increases were of "significant concern" and blamed falls in price and increased supply.
Martin Barnes, chief executive of charity DrugScope, said: "These figures show a marked and worrying increase in the use of cocaine powder, in the adult population as a whole and among 16 to 24-year-olds.
"While this is not necessarily a surprise given the drug's decrease in price and increase in availability over recent years, it is of significant concern, particularly the rise in use among younger people.
"Cocaine use is now at its highest level among adults since 1996 - one in eight 16 to 24-year-olds now report having used the drug."
Figures from the British Crime Survey showed cocaine use by 16-24 year-olds in the last year went from 5.1 per cent to 6.6 per cent between 2007/8 and 2008/9.
The survey showed 3 per cent of all adults admitted taking coke in the previous 12 months, up from 2.4 per cent - meaning there are an estimated 974,000 users.
The BCS figures also revealed a surge in ketamine use among 16 to 24-year-olds.
Around 125,000 young people used the horse tranquilliser last year.
The document revealed, for the first time, an official acceptance that use of Class A drugs is on the increase in the long term.
Analysis of the figures between 1996 and last year showed a "slight underlying upward trend" which is "significant over the long term", Home Office statisticians wrote.
Over the last year, among all adults, there were increases in the use of cocaine powder, ecstasy, anabolic steroids and ketamine.
In the longer term, cannabis use is in gradual decline, with from around 10 per cent of the adult population in 1996 to just under 8 per cent now.
Shadow home secretary Chris Grayling said the figures revealed the scale of social decay in Britain.
He said: "Hardly a day goes by without yet another depressing set of statistics about the scale of Britain's social problems under this Government.
"Drug addiction causes family breakdown, is linked to a substantial proportion of crime and causes long-term damage to people's health. We have to turn this round."
Home Office Minister Alan Campbell said overall drug use was "historically low".
He said: "It is encouraging that overall drug use remains historically low and that use of the most harmful drugs is stable.
"However, we are not complacent. We are taking comprehensive action to tackle cocaine use, from increased enforcement to reduce the supply, along with effective treatment, education and early intervention for those most at risk.
"Police and their partner agencies are seizing record numbers of drugs and cocaine purity is recorded at an all-time low. When people think they are taking cocaine, in some instances the actual purity is as low as 4 per cent.
"Police are increasingly seeing drugs cut with a hazardous cocktail of chemicals which include phenacetin, a known carcinogen.
"Cocaine can cause serious damage to health and these chemicals can, in themselves, cause significant harm to the user."
Liberal Democrat home affairs spokesman Chris Huhne said: "These alarming figures show that the Government has failed to tackle the supply and use of the worst drugs like cocaine, particularly among young people.
"The Government should give top priority to seizing Class A drugs and cracking down on dealers.
"By ignoring the experts of the Advisory Council on the Misuse of Drugs on which drugs matter most, ministers have helped reduce the importance of tackling the most harmful substances."
Comments