Cannabis should be legalised to bring Britain up to speed with a growing number of Western countries and end the "embarrassment" of domestic drugs policy, a cross party group of MPs have said.

Former deputy prime minster Nick Clegg and former health minister Norman Lamb joined Labour and Tory figures to back a new report which claimed legalisation could net the Treasury more than £1 billion a year in tax revenue.

The Adam Smith Institute and Volteface study argued that the UK should follow the lead of the United States, where four further states legalised marijuana in this month's elections.

It came as Germany gets ready to legalise cannabis for medical purposes and Canada prepares for all-out decriminalisation.