More than two million people in the UK get their nicotine hit via electronic cigarettes. But as 'vaping' replaces smoking – and is enthusiastically marketed by the beleaguered tobacco giants – no one is yet sure how safe it actually is

In 1963, a young Korean war veteran and committed 40-a-day smoker called Herbert A Gilbert from Beaver Falls, Pennsylvania, filed a patent for a product he described as a "smokeless non-tobacco cigarette". It functioned by gently heating a nicotine solution and producing inhalable steam, thereby "replacing burning tobacco and paper with heated, moist, flavoured air".

As the health risks of tobacco-smoking slowly began to emerge, Gilbert hopefully touted his device around the big tobacco and medical supplies companies. Several professed interest, but – at a time when, in Britain alone, some 70% of adult males were regular smokers – none apparently saw enough potential in his oddball invention to put any money into it.

Half a century on, after a decisive intervention by a Chinese pharmacist called Hon Lik, whose company Ruyan (literally, "Resembling Smoking") began exporting its version of the electronic cigarette in the mid-2000s, and – perhaps just as important – the widespread outlawing of tobacco smoking in enclosed public spaces in many western countries, the potential has become clearer.

In 2013, according to a survey by YouGov for the anti-tobacco charity Ash (Action on Smoking and Health), the number of e-cigarette users in the UK surged to 2.1 million, a three-fold increase over the previous year. The investment bank Goldman Sachs puts the products top of a list of "creative destroyers" – including big data, 3D printing and natural gas engines – that are likely to turn their markets upside down, and sees annual global sales of e-cigarettes hitting $10bn within a few years.

For V-Revolution in Covent Garden, which claims to be London's first shop dedicated exclusively to e-cigarettes, that means business is brisk. Since opening last May, the store has seen a 90% increase in custom, says assistant manager Elizabeth Playle. It now sells well over 50 reusable e-cigarettes a day – at prices, depending on their size and voltage, ranging from £25 to £90 each – plus many more bottles of e-juice, the liquid mixture of nicotine, flavourings and dilutants that the devices vapourise. Internet sales are booming.

"It's really, really taken off," says Playle, as a steady stream of dedicated vapers (as users are known) file in, try out a new flavour – some emulate the taste of traditional cigarettes, such as Chesterfield, Marlboro Red or Camel; others taste of apple, coffee, berries, tropical fruit, even piña colada – and hand over their £7.99 for a 20ml bottle, generally enough for the equivalent of around 200 cigarettes.

Playle's French-born assistant, Joelle Tabone ("Vaping is huge in France; every small town has at least one shop"), explains how they work. These are second-generation e-cigarettes, a step on from the disposable "cig-a-likes" – so called because they closely resemble a tobacco cigarette – which contain the "puff equivalent" of around 30 cigarettes and can be bought over the counter in corner shops and chemists for about £7 each.

Elizabeth Playce and Joelle Tabone of the V-Revolution e-cigarette shop in Covent Garden, London. Photograph: Linda Nylind for the Guardian

As you puff, the battery at the far end of the device powers a tiny electronic heating element, the atomiser, contained in the clear, refillable cartridge (the "clearomizer") attached to the mouthpiece. The e-liquid in the clearomizer, drawn on to the heating element by fibre wicks, disappears in a cloud of scented vapour, some of which you inhale (the rest evaporates).

The e-juice is available in three different nicotine strengths, and more sophisticated devices also let users adjust their e-cigarette's voltage to vary the potency of the "hit" they get. The idea, essentially, is that e-cigarettes deliver all the sensations of smoking, plus the all-important nicotine, without the 70-odd carcinogenic chemicals that tobacco cigarettes generally deliver as well.

Logically, by far their biggest users are smokers. According to Ash's survey, nearly two-thirds of e-cigarette users in the UK are current smokers seeking to cut down or give up altogether, while the remaining third are ex-smokers who have already stopped and are keen not to restart. Only 0.1% of e-cigarette users are nonsmokers.

That certainly chimes with Playle's experience: the "overwhelming majority" of V-Revolution's customers are tobacco smokers who want to stop, she says – some of them on their doctors' orders. "I would never promote these as a 'healthy option', because the only good smoking is no smoking," she says. "But when someone has been told they must give up, and they come in here and start using these … You see the difference."

So far, so marvellous: on the face of it, e-cigarettes look like a near-miraculous innovation in tobacco harm reduction. By the World Health Organisation's estimates, tobacco kills half its users and six million people each year die from the direct and indirect effects of smoking. But the public health community is deeply divided over e-cigarettes. "Some people think they're fantastic, the miracle product that is going to stop people smoking cigarettes," says Anna Gilmore, director of the Tobacco Control Research Group at the University of Bath and UK Centre for Tobacco and Alcohol Studies. "Others think they're a potential disaster, because nicotine is an addictive drug and because e-cigarettes may re-normalise smoking."

As far as the health risk is concerned, it is fair to say, as Gilmore notes, that "e-cigarettes are certain to be way less harmful than cigarettes. Common sense would dictate that." But equally, while early tests appear to be at least partially reassuring, e-cigarettes have simply not been around long enough for there to be any reliable long-term studies of the risk they might represent.

The World Health Organisation (WHO) calls the devices' safety "illusive", noting that the chemicals they contain are often not disclosed and have not been properly tested. The US Federal Centers for Disease Control (CDC) has said there is "enough evidence" to say that switching to electronic cigarettes would "likely be healthier" than smoking. But mainly because of the near complete lack of regulatory oversight, and because e-cigarettes do, after all, contain nicotine, which is far from being a "benign substance", the CDC will not go so far as to pronounce them safe either.

The British Medical Association (BMA) has also warned it is worried by the lack of peer-reviewed studies on e-cigarette safety, and public health officials elsewhere have expressed concerns about the purity of the products' ingredients, the precise dose of nicotine delivered by different devices and liquids, inaccurate product labelling and an overall lack of quality control in the manufacturing process. "The real truth," says Gilmore, "is that we just do not know. We cannot say e-cigarettes are risk-free. We cannot yet be sure what impact they will have on smoking rates or population health, whether they'll be the miracle product or not."

Nor is there unanimous agreement among public health experts that e-cigarettes even help people to give up smoking. WHO has said their efficacy as an aid in giving up smoking is "yet to be demonstrated", adding that it "strongly advises" consumers not to use them until national regulatory bodies have declared them both effective and safe. Similarly, the BMA currently encourages doctors to recommend other nicotine replacement therapies ahead of e-cigarettes (although it says that for patients who are unwilling to use nicotine gum or patches, or tried them unsuccessfully, the devices can be presented as a lower-risk option than smoking tobacco).

Many experts, including Ash's former director, Clive Bates, feel strongly that any risks associated with e-cigarettes are outweighed by their capacity to dramatically take the harm out of using nicotine. Others, equally strongly, disagree, arguing that even if e-cigarettes turn out to be perfectly safe, they risk re-normalising what is now, in most developed countries, a pariah habit: a "lifestyle product" that is actually a way to get, or keep, people hooked on the real thing.

UK studies seem to suggest little evidence that e-cigarettes might have this effect. But in a study of 40,000 young Americans unambiguously entitled E-Cigarettes: Gateway to Nicotine Addiction for US Teens, the University of California's Center for Tobacco Research and Education found that using e-cigarettes was likely to increase the probability of experimenting with traditional cigarettes.

And some more outspoken (and, in the vaping community, much-vilified) opponents of e-cigarettes such as Martin McKee, professor of European Public Health at the London School of Hygiene and Tropical Medicine, argue that the high proportion of vapers who also continue to smoke tobacco means that many are, basically, kidding themselves. Far from having a major positive impact on public health, the anti camp believes, the whole e-cigarette phenomenon is really about encouraging "dual use" of e-cigarettes and tobacco, boosting tobacco companies' profits at a time when sales in the developed world are falling fast, as well as buying them some much-needed credibility.

E-cigarettes are now becoming big business. Photograph: Sean Smith for the Guardian

And here, things start to get complicated – because the world's leading tobacco companies are busy turning themselves into leading players in the e-cigarette market. RJ Reynolds, Philip Morris, Japan Tobacco International, Imperial Tobacco (which sells through Boots) and British American Tobacco (BAT) have all either already launched e-cigarette lines, or have them in development – and are marketing them in almost exactly the same way as cigarettes used to be in the days when tobacco advertising was still allowed.

"E-cigarettes are being marketed just like cigarettes were in the past," says Gilmore, pointing to a TV advertisement for Vype, the e-cigarette brand owned by BAT, which featured an attractive young couple running through a cityscape before leaping into a cloud of vapour promising of "pure satisfaction for smokers".

Gilmore says e-cigarettes could be seen as "a godsend for the tobacco industry. With cigarette companies selling e-cigarettes, there isn't the competition between e-cigarettes and cigarettes that would likely reduce tobacco-smoking. And just as their last advertising avenue for tobacco – cigarette packets – is being closed down, tobacco companies can advertise e-cigarettes – effectively showing lots of pictures of people, basically, smoking."

Selling e-cigarettes also allows the tobacco companies access to the politicians and public health bodies who are currently debating how the vaping market should be regulated, Gilmore points out – handily circumventing Article 5.3 of the WHO's Framework Convention on Tobacco Control, which effectively bars the industry from so much as talking to governments about public health policy in relation to tobacco. "But now they are selling e-cigarettes, they can claim to be on the side of the angels," she says. "It just really muddies the waters."

Governments are still uncertain about how to respond to e-cigarettes. Some, as in the UK, want to regulate them essentially as medicines – as aids to quitting smoking – meaning they will be subject to the same rules on, for example, ingredient quality as apply to nicotine patches and gum.

The WHO and US seem to favour regulating e-cigarettes in exactly the same way as tobacco, with strict advertising rules and heavy taxation. The EU looks to be somewhere in the middle, proposing both controls on ingredients and nicotine strength and marketing restrictions. Some countries, such as Brazil, have simply banned them outright, while many local authorities – including New York City, Chicago and Los Angeles, have outlawed their use in public places, just like tobacco. With passions running high on both sides, the debate around e-cigarettes seems unlikely to be settled any time soon.

• This article was amended on 6 May 2014 because the original described Clive Bates as Ash's UK director. This has been corrected to say former director.