Senior Liberal Democrats have urged the party's leadership to consider backing the legalisation of all drugs.
'Licensed drug dealers could undercut illegal counterparts'
Chris Davies MEP said the "war on drugs" had been lost and the only way to undermine the criminals controlling the trade was legalisation.
Speaking at a fringe meeting at the party's Brighton conference, he urged Lib Dems to lobby home affairs spokesman Nick Clegg to change policy.
He was backed by education spokesman Baroness Walmsley.
She told the meeting it was time to "think the unthinkable" on the drugs issue and consider legalisation.
"I think the issue is a no-brainer. We have got to go along this direction," she said.
It would contribute to harm reduction, tackle gun culture, save police time and reduce the amount of drug-related crime including theft.
"We are not talking about selling penny packets in a sweet shop. We are talking about sensible controls," she told the meeting.
She urged party members to "perhaps write to Nick Clegg and say we want more discussion in the party".
She denied the stance was seeking to turn Britain into the drug capital of the world.
"The last thing we would want is for any child to take drugs," she said.
"But also people should have the freedom to put into their bodies what they want without any more harm than they would want."
Mr Davies, who is an outspoken campaigner for the decriminalisation of drugs, said he wanted the Lib Dem policy on drugs to be "looked at again".
"I hope Nick Clegg will explore this issue again. I know from brief talks with him he is mindful to do so but I know he is mindful of giving ammunition to his opposition," he told the meeting.
The North West MEP likened the "war on drugs" to the Emperor's new clothes. "We keep saying 'war on drugs' year in year out but it achieves nothing.
"It's time to stop pointing and laughing at this piece of nonsense."
Mr Davies said he had never taken an illegal drug but had once been arrested for possession of a tiny quantity of cannabis he was using to illustrate a point at a public meeting.
He said state licensed drug dealers could undercut illegal dealers on price and put them out of business.
He also called for a debate about how drugs would be sold once they had been legalised, "if you are going to sell it through a licensed outlet, a chemist's shop or something like a sex shop".
He argued that legalisation could not just occur within the UK but had to happen around the world.
He urged party members to lobby the United Nations, which meets in Vienna in March to reconsider the 1961 convention on illegal drugs, which guides policy around the world.
Inspector Jim Duffy, chairman of the Strathclyde Police Federation, backed Mr Davies' call for legalisation.
Stressing that he was speaking in a personal capacity and not on behalf of Strathclyde Police, the inspector said: "We are not winning the war against illegal drugs.
"We are fighting hard, becoming smarter and sharper; as are those we are fighting against. If the current rules of engagement do not change then we are destined to continue to fail."
He said drug addicts should be given access to substances that "do exactly what they say on the tin".
"Lives could be saved if addicts purchasing regulated drugs could be sure of their strength and purity," he added.