When Richard Lane suddenly fell unconscious while driving his Saab one Friday lunchtime in Kent, it was eerily appropriate that he ended up in a cemetery. The 1997 crash left the car a write-off and him with two broken vertebrae at the base of his spine. 'I was incredibly lucky. The police told me I should have been dead,' he recalls.

The father-of-two had fallen asleep at the wheel while suffering a hypoglycaemic attack caused by his blood sugar level dropping dangerously low. It's a situation with which the 250,000 Britons suffering from type 1 diabetes are familiar. Such attacks are one of the complications of this chronic, sometimes fatal and increasingly common disease.

Lane is lucky. He is one of just 12 people in Britain who have received a pioneering treatment called islet cell transplantation which he credits with giving him something close to a second stab at life. The 63-year-old was the third person to have the operation, and the first to banish his insulin dependency as a result. Soon up to 80 type 1 diabetics could benefit from the same innovation - which leading doctors hope may ultimately let all 250,000 people with the disease become insulin-free.

Lane's diabetes consultant, Professor Stephanie Amiel of King's College Hospital in south London, and a consortium of five other specialists from hospitals in London, Oxford, Bristol, Manchester and Newcastle, have spent years exploring the potential of islet cell transplantation. They are now asking the NHS to fund the £70,000-a-patient treatment - and make Britain a world leader in this field. Health Secretary Alan Johnson is due to decide before Christmas.

After success with the dozen patients treated so far - nine have not suffered a major 'hypo' since receiving islet cells taken from donated pancreases, and some have gone a year without needing to inject themselves with insulin - the doctors and hospitals have submitted a joint bid to the National Commissioning Group, an NHS body which advises health ministers whether to fund new, breakthrough treatments. They want the Department of Health to finance the creation of a network of six hospitals across England where people such as Lane can get this treatment, and thus regain a normal life.

The signs are good. Dr Sue Roberts, the government's diabetes 'tsar', is backing the bid. Officials at the NCG have helped ensure a strong bid. And Ministers are aware that diabetes is a growing, and hugely costly, problem.

Most diabetics get warning signs of an approaching hypoglycaemic attack - sweating, feeling shaky, tingling in the lips, going pale, heart pounding, confusion and irritability.

But Lane, from Bromley, south east London, was among the one in four type 1 diabetics who get little or no prior notice. As he reached for the Lucozade in his glove compartment to stave off the attack with an instant sugar hit, he drifted off into a coma in a few seconds, aware what was happening but unable to do anything. His foot slipped from the brake pedal on to the accelerator. The car veered off to the right, hit a fence and bounced into the air before landing in the graveyard.

'Hypoglycaemic attacks can be quite dangerous,' says Lane. 'You become literally helpless unless you have time to correct the situation; if you don't correct it, you end up unconscious. Uncorrected attacks kill people.' That's why type 1 sufferers always keep fizzy drinks, chocolate or energy tablets close by. Their bodies have stopped producing any insulin naturally so they need to inject it to control their blood sugar level, but too much can cause the level to fall too low.

At the time of the crash Lane was having about six attacks a week. They would cause him to temporarily lose his eyesight, stop being able to feel his feet or go into a coma. But today, 32 years after being diagnosed with diabetes, he no longer has to worry. The retired senior accountant received 1.25 million islet cells extracted from the pancreas of an organ donor and transplanted in three procedures between September 2004 and January 2005.

Afterwards Lane enjoyed about 12 months in which he no longer had to maintain his tediously, necessarily strict regime of injecting himself with insulin five times a day to maintain a healthy blood glucose level. For type 1 diabetics, that represents exciting liberation. In January 2006, he had to resume taking some insulin, though only about half his previous dose.

Such are the realities of keeping at bay a disease formerly known as 'juvenile onset diabetes' because it is often diagnosed between the ages of 10 and 14. It reduces sufferers' life expectancy by about 20 years, kills between 500 and over 2,000 people a year and dominates the lives of all who have it.

The much more common form of diabetes, type 2, has 1.9 million sufferers and claims far more lives. The charity Diabetes UK estimates that together they are Britain's fifth-biggest killer, bringing premature death for up to 33,000 people a year. The number of people diagnosed as having either type is rising.

While the transplants did not work in three patients, the 75 per cent success rate, albeit on a limited number of patients, has led doctors to believe the technique could revolutionise the management of type 1 diabetes and, in time, stop it wrecking the lives of not just those suffering from it but also their family and friends, whose knowledge and intervention when an attack strikes can be crucial.

'Islet cell transplantation has completely transformed my and my family's life,' says Lane. 'Afterwards I was able to start eating what I liked again for the first time since I'd been diagnosed. And I could exercise again after years of not being able to play sports as much as I wanted. I've got all my energy back. I no longer have hypoglycaemic attacks or comas, as I had previously done at work, home, a squash club, a business dinner, Geneva airport - or in the car.

'But the greatest thrill to me is that my wife Paula, son Simon and daughter Rachel can now live their lives without constantly worrying that I might be ill at any moment - and be ill enough to die from it. That was a real threat.'

Each of his operations lasted about an hour with just a local anaesthetic plus some sedatives. 'It's like sophisticated keyhole surgery,' he says. His operations were done by a team of radiologists and liver transplant surgeons at King's College Hospital. They used a procedure commonly deployed when repairing someone's liver to drip the islet cells from the donated pancreas into a vein to the liver. It is a surprisingly simple way of tackling an unforgiving disease, and far less risky and more convenient than the alternative of transplanting a whole pancreas, if one is available.

Amiel lists the potential consequences of hypoglycaemic attacks: coma, fits, driving licences taken away because sufferers cause crashes, an inability to do certain jobs due to 'funny turns', a parent's inability to look after their children, marital break-ups caused by the constant stress and even violence. She recalls how one female patient suffered an attack while chopping vegetables, lost control and injured her husband, who needed 60 stitches.

'The reason for doing this is that you can stop hypoglycaemia dead', says Amiel. That is a huge breakthrough. But the doctors have bigger ambitions: 'The ultimate goal would be that we could treat diabetes with cell therapy rather than with insulin so people who have type 1 wouldn't have to take injections and worry about long-term medical risks. Islet cell transplantation could ultimately replace insulin in the next 10-15 years,' says Amiel.

Research in Britain into human islet transplantation began in the Nineties but was wound up when initial results were not promising. However, breakthroughs by Canadian doctors encouraged Amiel and others to try again. More than £400,000 has been spent so far, much of it from Diabetes UK, to get this far.

Type 1 diabetes is on the rise, especially among the under-fives. Professor Polly Bingley of Bristol University believes children's lack of exposure to infection, which is also blamed for the rise in asthma and allergies, may be the cause. Growing pollution, changes in children's food intake and the fall in breast feeding may also be factors, according to Bingley. The results of the pioneering treatment Lane and the other patients have had could have profound implications for future generations for whom, experts say, both forms of diabetes will be a growing problem.

Now, say the researchers, it is time for the NHS to help the thousands of type 1 diabetics who get little warning of their hypoglycaemic attacks by giving them access to a treatment that could let them live normal lives. 'It's make-or-break time for islet cell transplantation in the UK,' says Dr James Shaw of Newcastle University. 'If it doesn't get funding it's impossible to see how anyone else can be transplanted because there isn't any money otherwise.'