For a drug of abuse with a particularly unpleasant side effect – it destroys the bladder – ketamine has had a chequered history. Discovered in the 1960s, it was used as an anaesthetic on soldiers in the Vietnam War and found favour with vets as a horse tranquilliser before arriving on the dance scene at the end of the 1990s.

As its popularity soared, warnings about its damaging effects increased, with some heavy users having to undergo surgery to restore their urinary function. But today ketamine could be about to enjoy a renaissance as a front- rank treatment for depression.

Researchers in the US who have studied its effects say small amounts of the drug can provide immediate relief to patients for whom existing antidepressants do not work. Its impact is so rapid and so dramatic that experts are hailing it as an extraordinary advance.

Robert Duman, professor of psychiatry and neurobiology at Yale University School of Medicine in Boston, Massachusetts, said: "The rapid therapeutic response of ketamine in treatment-resistant patients is the biggest breakthrough in depression research in half a century."

In a review of its effects published in the journal Science, Professor Duman and his colleague George Aghajanian, who's also a professor of psychiatry at Yale, chart the rise of ketamine as the brightest new hope for the millions of people affected by chronic depression, which disrupts sleep, suppresses appetite and drains the pleasure from life. At least a third of patients with depression get no relief from current treatments and even in those for whom they are effective, the drugs can take up to a month to work.

By contrast, a single dose of ketamine has been shown to lift depression within hours and the effect lasts for up to 10 days. Understanding how ketamine works in the brain could lead to the development of an entirely new class of antidepressants, the researchers say.

It would represent a new phase in the life of the drug synthesised as an anaesthetic that was originally prized for its short-acting effects. That meant a soldier in the battlefield could have surgery and be awake and alert soon afterwards, which accounted for its use by the US in Vietnam.

Later vets came to value it as an anaesthetic for equine surgery and it was also used as a pain medication for animals and humans. Its hallucinatory effects were first documented in the 1970s by authors including the American physician, John Lilly, who described in his autobiography The Scientist his experiments with ketamine and whose life work inspired the 1980 film Altered States.

Ketamine emerged on the club scene in Hong Kong in the late 1990s and by 2005 was widely available in Britain. It was taken by middle-class professionals at weekends rather than hardened drug users, according to DrugScope. In response to anxiety about its rising popularity, in March, Home Secretary Theresa May ordered a review of its effects by the Government's Advisory Council on the Misuse of Drugs. Concern has grown about side effects including damage to the bladder and kidneys, which can leave users with difficulty urinating. Some heavy users have had their bladders surgically removed.

While the drug itself cannot be used as a treatment for depression because of its psychoactive impact on the brain, researchers say derivatives based on it have shown promising results. But they do not act as quickly – yet.

Ketamine works on a different neurotransmitter system to current antidepressant drugs, of which the best known is Prozac. Evidence shows stress and depression weaken the connections between neurons, causing them to atrophy. The brains of patients who have suffered a lifetime of depression have been shown in imaging studies to have shrunk, especially the parts that control emotion and mood.

In their review, Duman and Aghajanian say ketamine triggers release of the neurotransmitter glutamate, which "rapidly increases the number and function of synaptic connections". This has focused attention on "synaptogenesis" – restoring the lost synaptic connections – as a "fundamental process for the treatment of depressive symptoms". More studies are required to determine how stress destroys synaptic connections in the brain and how antidepressants rebuild them. "These studies will contribute to the development of safer more efficacious antidepressants that last longer and act faster," the authors say.

On the battlefield

First synthesised in the mid-1960s from an already available recreational drug, ketamine was initially developed as an anaesthetic that found favour among American GIs in Vietnam. Patients quickly recovered from the effect of the anaesthetic and could be moved quickly.

Have a good trip

John Lilly, a doctor and psychoanalyst, was among the first researchers to document the hallucinatory effects of ketamine and similar drugs such as LSD.

Horse tranquilliser

Ketamine is widely used by veterinarians as an anaesthetic and pain killer, especially in equine surgery – hence its label as a horse tranquilliser.

Club drug

Ketamine arrived on the club scene in the late 1990s, gaining popularity first in Hong Kong. By 2005, its use was widespread in Britain. In March 2012, Theresa May, the Home Secretary, ordered a review of its risks.

The successful trial

In the late 1990s, John Krystal, a professor of psychiatry at Yale University, gave seven severely depressed patients a dose of ketamine. The "huge, obvious" improvement in their condition was immediate.

Heroin use among young adults in sharp decline

Drug addicts are getting older and more over-40s are dying, health officials said yesterday.

But younger adults are becoming more savvy about the dangers of addiction and the number of young heroin addicts has dropped to its lowest recorded level, the National Treatment Agency for Substance Misuse (NTA) said.

Paul Hayes, the NTA's chief executive, rejected suggestions that the Government should legalise or decriminalise drugs.

"Any move towards legalisation would certainly mean an increase in use, particularly in the most problematic drugs," he said.

His warning came as NTA figures showed the over-40s now make up almost a third of the whole treatment population in England .

More over-40s are dying from drug misuse, up to 802 last year from 504 in 2001, figures showed.

"It's a population that began using 20 or 30 years ago," Mr Hayes said.