Sir Richard Branson has called on politicians to "be braver" on drugs policy, saying they are wrong to believe decriminalisation would be a vote-loser.

Speaking on the eve of a major international drugs conference, Branson said that, if politicians acted on what they really believed rather than following a Daily Mail agenda, they could reduce a "ballooning" prison population exacerbated by excessive numbers of convictions for low-level drugs offences.

Branson, who is to give a video address at the opening of the International Harm Reduction Conference (IHRC) in Vilnius on Sunday , said recent comments from Latin American leaders that the "war on drugs" had failed marked a "sea change" among politicians in that region and should spur those in the UK and elsewhere into action.

Stepping up his outspoken campaign since becoming a member of the Global Commission on Drugs more than two years ago, Branson said: "People are languishing in prisons and lives are wasted. [When I] speak to politicians individually, I've found no one who disagrees. I would say that, if a party really took on the issue [of decriminalisation] and went for it, they would not lose votes. There is an economic case for investment in harm reduction. It has been proven in other countries that treating drug addiction as a health issue, not criminalising it, benefits society as a whole."

The Virgin boss's remarks come just days before a UK charity and national centre of expertise on drugs and drugs law, Release, is to publish a report detailing the disproportionate impact of policing policies on black and ethnic minority communities. Initial findings from the report, seen by the Observer, show that in 2009-10 nearly 550,000 people in England and Wales were stopped and searched by police for drugs, but just 7% of them were arrested. It also reveals that black people are six times more likely to be stopped and searched for a drugs offence than white people.

Release's executive director, Niamh Eastwood, said stop and search was one of many issues that government needed to address urgently and that the official stance on drugs policy was out of step with public opinion. "Some politicians are showing the courage that Latin American leaders have demonstrated. The deputy prime minister [Nick Clegg] has publicly called for a review of the UK drug laws and policies and was not criticised for his views. Politicians need to recognise the damage that is caused to the tens of thousands of mainly young people in the UK who are criminalised for drug possession every year. Their inertia in this area of policy simply cannot go on."

There were further signs last week that drugs policy reform is gaining momentum. On Thursday, Branson was a co-signatory to an open letter from a coalition of scientists, celebrities and politicians calling for the government to overhaul drugs legislation. Led by Green MP Caroline Lucas and including Dame Joan Bakewell, Zac Goldsmith, Conservative MP for Richmond Park, and Professor David Nutt, former chair of the advisory committee on drugs under the previous government, the signatories said the government's approach to drugs policy "does little to address the root causes of addiction and pointlessly criminalises people". The group called for an independent review of the effectiveness of the Misuse of Drugs Act 1971.

A Downing Street petition calling for an assessment of the cost-effectiveness of the £3bn annually spent on "the current enforcement-led approach" to illicit drugs has already gathered more than 25,000 signatures.

There is evidence, too, that many MPs are receptive to a review. A ComRes poll of MPs for the UK Drug Policy Commission last year found that 77% of 150 MPs surveyed agreed that the UK's current policies were not effective in dealing with problems caused by illegal drugs.

In a statement the Home Office said: "Drug usage remains at its lowest level since records began. However, the home affairs select committee's report has provided a useful contribution to the debate and a number of its recommendations are now being taken forward, including a study seeing if we can learn from the approach of other countries."

This latest phase of the drugs debate in the UK is taking place against a backdrop of shifts in international thinking around illegal drug distribution and use. In the US, which incarcerates more people for drugs offences than any other country – and where two states, Colorado and Washington, recently legalised marijuana for personal use – the liberalisation of drugs laws is back on the political agenda. When leaders at the Organisation of American States (OAS) published their landmark report in May urging consideration of alternatives to prohibition, some experts called it a "game-changing" call against policies that have given birth to drug cartels and caused tens of thousands of deaths across Latin America.

However, many drugs experts, including a number attending the IHRC conference, argue that, amid the recent high-profile calls for drugs liberalisation and reform to criminal justice, it is essential that the broader implications of current drugs policies on public health should also be a top priority. Ann Fordham, executive director of the International Drug Policy Consortium, pointed out that where drugs policies are most draconian public health risks are greatest.

In Russia, for example, where methadone – commonly used in harm-reduction approaches as a substitute for heroin – is a banned substance and where there are no state-funded needle exchanges, rates of HIV and hepatitis C among injecting drug users are at "epidemic" levels.

Fordham stressed that governments could not afford to be complacent. In the UK, where harm-reduction strategies such as needle exchanges have helped to reduce rates of HIV infection among injecting drug users to 1%, the continued "criminalisation" of people for personal use undermined the successes, she said.

"The fact is that, if we look at the people most affected by a punitive approach to drugs, it is the most marginalised and the poor; it is people from ethnic minority groups. They are the ones who end up in prison."