By Tadhg Enright, Sky News Correspondent
Severe criminal penalties on drug taking makes no difference to the level of substance use in a country, a Government report has indicated.
The first Home Office study of the issue based on international evidence has caused a split within the coalition, with Lib Dems supporting its proposed reforms and the Conservatives opposing them.
It found "no apparent correlation between the 'toughness' of a country's approach and the prevalence of adult drugs use".
"There is evidence from Portugal of improved health prospects for users, though these cannot be attributed to decriminalisation alone," the report said.
"There are indications that decriminalisation can reduce the burden on criminal justice systems."
It also found worse health outcomes in the Czech Republic after possession was criminalised, and no evidence of lower use.
Danny Kushlick, founder of Transform Drug Policy Foundation, called the report a "historic moment" in drugs policy.
"For the first time in over 40 years the Home Office has admitted that enforcing tough drug laws doesn't necessarily reduce levels of drug use," he said.
Although it was completed several months ago, the report has been kept under wraps to be released alongside another study which recommends so-called legal highs be criminalised.
The Lib Dems have long supported a review of Britain's drugs policy and the party's minister in the Home Office, Norman Baker MP, told Sky News he backs its findings.
"We're very clear that what we need to do is move towards a health based approach - to stop criminalising people unfairly and to make sure that we don't lock people up, but rather deal with it as a health issue," he said.
But a Home Office spokesperson said: "This Government has absolutely no intention of decriminalising drugs.
"Our drugs strategy is working and there is a long-term downward trend in drug misuse in the UK."
But the Home Office is giving strong consideration to the report backing the criminalisation of so-called legal highs, which are sold online and in high street "head" shops.
Both coalition parties back a blanket ban on their sale, which has been welcomed by campaigners including Maryon Stewart, whose daughter, Hester, died in 2009 after taking a lethal cocktail of alcohol and the legal substance GBL.
She told Sky News: "In that time, there've been as many crime prevention ministers as there have years, and it's been a really difficult journey.
"I think everyone agrees that there needs to be change, what's happening right now isn't working."
An opinion poll in The Sun suggests for the first time, most Britons believe the war on drugs can never be won.
A total of 71% of those surveyed said the war had failed, while 51% said it will always be doomed. The survey found 65% supported a review of drugs policy.