It could be a scene from Mad Men, only the execs are in M&S and the office is in Borehamwood. A marketing man named Roger sits at his desk, exhaling luxurious billows of smoke that twist and dance and vanish as they drift towards the ceiling tiles. “Is that a cigar he’s smoking?” I ask my tour guide, Michael Clapper of e-cigarette company Vapestick. “That’s a Vigar!” he announces with undisguised triumphalism. “Look at him! He looks like the boss.” In fact, Michael is the boss. He’s showing me around the headquarters of what has rapidly become a multimillion-pound business. We’ve already met Lorna from customer services, who was carrying boxes down a corridor with a black e-cigarette on the go, its tip glowing an alien blue. “The whole day I’m like this!” she told me, giddy with the delightful madness of it all. She pulled it from her mouth and showed me the top. “You can see the bite marks.”

Clapper sits me down at a conference table with some chocolate biscuits and begins puffing on a black contraption with a window through which I can see a yellow-brown liquid sloshing. He’s in a dark suit, light blue shirt open at the collar, neatly groomed chest hair just visible. Stocky and shaven-headed, Clapper is part boardroom, part boxer. “This is our Advanced Vaping System,” he explains, holding the black stick between thumb and forefinger. “It has all the convenience of cartomisers, and all the power and performance of the latest vaporising devices.”

If you don’t understand any of that, you’re not alone. A cartomiser is a cartridge that contains e-liquid as well as the technology necessary to atomise it, or turn it into faux smoke. But all you really need to know is that electronic cigarettes are used predominantly by smokers who want to cut down or quit, and that they are tobacco-free, containing only nicotine, flavourings and stage smoke. Except users don’t “smoke”, they “vape”. And, according to the monthly Smoking In England survey, an almighty 20% of smokers and 30% of recent quitters have vaped, while health charity Ash gives a figure of 2.1m users across Britain. In a few short years, the e-cigarette industry has become worth £90m in this country and £1.8bn worldwide. Lily Allen has been pictured vaping, as has Cara Delevingne. Charlie Sheen has promoted something called NicoSheen. Last month, the first e-cigarette TV ad was broadcast in an ITV break, while Oxford Dictionaries announced vape to be their word of the year: its use, they said, had more than doubled over the preceding 12 months.

Back in 2009, the global financial crisis killed the successful mortgage and loan company Clapper had founded at 19. “I thought, what am I going to do with my life?” he tells me. He had, at the time, a 50-a-day Marlboro Light habit. “I’d got to a point where I couldn’t function without nicotine. It was a religion.” His wife, Caroline, was pregnant with their second child. In desperation, she ordered a “Health-E-Cigarette” from China via the internet. It was plastic and toy-like. A red light glowed when you sucked it. Clapper was dubious. “I had a puff. It was amazing! A plume of vapour was generated, which gave the same throat-hit sensation you get when you smoke a cigarette.” Excited, he went online and discovered that, in the US, an embryonic subculture was forming around e-cigarettes. “But none of the brands had nailed it. Not many people, myself included, would want to walk around with a fake cigarette. I thought, if this could be made to look like it wasn’t a cigarette, like you’re making a statement that you’re doing something different, there’s a chance it could really capture people.”

Although others were beginning to think the same way, the market was still dominated by cig-a-likes, or brands that looked like the real thing. Clapper and Vapestick’s co-founder, Michiel Carmel, instead developed devices that were black, chrome and glowed blue when drawn from. As well as the usual tobacco and menthol flavours, they launched in 2010 with cherry, apple and vanilla. The products weren’t presented as dreary, pseudo-medical devices. “When you opened the package, it was almost as if you’d bought a new smartphone.” Their first retail customer was Harrods. “We went from zero to around £1m revenue in 12 months. We’ve experienced at least 100% growth year-on-year since, and expect to see at least another 200-300%.”

It’s been 13 years since I quit my 50g a day roll-up habit. Although I’d been coughing up brown phlegm in the mornings for months, the decisive moment came when I overheard a fashion assistant discussing me with an actress I’d just interviewed. “Did you see the yellow stains on his fingers? Disgusting.” Shame worked on me where the fear of distant, hacking death had failed. Giving up was one of the most unpleasant experiences I’d been through, and I assumed I’d be unable to vape, for fear of getting addicted again. But it turns out Vapestick makes a range of zero-nicotine products. Clapper hands me a pack of five fruit-flavour “shishas”. They’re the size and shape of tobacco cigarettes, in pastel colours with a large, sparkly, diamond-effect tip. I pull out a grape-flavoured one in bright mauve and eye Clapper’s Advanced Vaping System enviously. “They’re quite effeminate,” I say.

“They’re for a very certain demographic.” He nods. “For nightlife. Having fun.” I pull the rubber stopper from the hole in the tip. “The trick is to take a gentle but longer, deeper draw,” he says. “You’re heating it up, letting it build. You don’t have to put much effort in compared with a traditional cigarette.”

Walking back towards the station on a freezing December morning, I begin vaping the shisha, avoiding eye contact with passersby. I am immediately 26 again, loving the sensation of the “smoke” hitting my throat and pushing out through my nose. I find myself glancing reflexively at the tip after I’ve taken a draw. I feel a little bit cool until an elderly woman on a mobility scooter laughs in my face, reminding me I’m a 40-year-old man sucking on a sparkly mauve pretend cigarette.

Later that day, I pay a visit to the Vape Lab, a lounge that opened this spring in Shoreditch, east London. On the journey from Borehamwood, I had found myself irritated by the fact that I had to put my shisha away at the station. When I arrived in London, I took a long detour, outside in the cold, just so I could vape a bit before getting on the tube. Perhaps the grape flavour was powerfully delicious enough to compel me to alter my behaviour. I couldn’t possibly be addicted, I thought to myself as I walk into the Vape Lab, its interior as densely fogged as a Yorkshire pub in the 20s. Two men sit at a wooden bar serving hot drinks, doughnuts and e-liquids such as Colonel Custard, Jack the Ripple (“British raspberry ripple ice-cream”) and Capote (“Pineapple, peach, banana, cream”). Four people in their 20s are busy at a table, iced coffees in jam jars and technical paraphernalia spread out before them.

“Can I ask some questions?” I say.

“Depends,” one man replies suspiciously, frowning at some wire. “What’s your take?” I wave my little grape shisha at them all and grin, “I’m into it!” then take a delicate puff. I regret it immediately. These people are vaping from heavy chrome and black machines with gorgeous industrial detailing, all intricately engraved, and they are generating Flying Scotsman levels of vapour. “This is plated with 24-carat gold,” says James Clelland, one eye closed against the storm front of cloud tumbling from the holes in his face.

“I have a black one,” adds his partner, Ileigha Kohoutek. “It’s, like, designer. We manufacture them. We have a factory in San Diego.”

Clelland and Kohoutek are tattooed and beautiful members of sort-of-successful pop-punk bands (Shining Through and Romance Mechanics) and are in London, from the US, on holiday. “We’re still making music, but not touring,” Clelland says, apologetically. But when I ask after their vape business, Dotmod, their eyes meet in a joyful sparkle. “We’re doing really well,” Kohoutek grins.

The man with the wire turns out to be the Vape Lab’s manager, Igor Kapovsky. He is also a vape modifier, or modder, and is doing Clelland a favour: “I’m building him a coil,” he says, explaining that the coil atomises the e-liquid. “It’s a piece of kanthal wire, wrapped around silicone, that has a certain electrical resistance based on its length and thickness. The lower the resistance, the hotter it will get – and the faster it will evaporate and the more flavour you’ll produce. It’s not all about the clouds and plumes; it’s about the flavour and the nicotine delivery.” The scene reminds me of sitting around a table of craftsmen spliff builders, all nerdily discussing hydroponics, sativa strains and THC levels. They have the same pride in their work. “Absolutely.” Kohoutek nods. “Exactly.”

‘I feel a bit cool until a woman laughs, reminding me I’m a 40-year-old man sucking on a sparkly pretend cigarette.’ Model: Duane Facey-Pearson at Ugly. Location: Rio Cinema, London. Photograph: Manuel Vazquez for the Guardian

And to think it all began in a dream. In the early 2000s, Hon Lik, a 47-year-old pharmacist from northwest China, was living with a 30-year nicotine habit. When his father died of lung cancer, Hon tried hard to quit. Occasionally, he’d forget to remove his nicotine patch before bed and would lie for hours suffering a train of nightmares. One night he dreamed he was drowning in the sea. The water sucking him down turned into a strange, misty vapour. He woke, suddenly, with an extraordinary idea: what if there were some sort of device that could generate harmless vapour instead of smoke? Surely that would be a more pleasurable nicotine delivery system than these awful patches?

Hon received his first e-cigarette patent in 2003. His pioneering device, launched in 2004, contained a liquid solution of nicotine and propylene glycol that was atomised, on inhalation, inside a cigarette-sized tube. It generated the illusion of smoke that filled the user’s throat and could then be exhaled in satisfying great billows. But the world didn’t take to e-cigarettes quite as Hon hoped. At least not his e-cigarettes. Following years of copyright rows and royalty disputes, Hon’s patents were sold to Imperial Tobacco in 2013 for $75m. By then, they were owned by a company, Dragonite, of which he was just a minor shareholder. “I’m still living like a poor man,” he told journalists last year. “Maybe in 20 or 30 years I’ll be very famous.”

Since then, the vape market has flourished, creating its own eccentric corners. As well as modders such as Kapovsky, there are vape video-bloggers who critique new flavours and devices (often in surprisingly croaky voices). There are YouTube personalities such as Abby Vapes, who hosts tutorials in which you can learn tricks such as “the dragon” (the art of exhaling through your nose and the sides of mouth). The range of flavours has expanded to more than 8,000 and now includes roast beef, unicorn milk and vagina mist. Packs of men (it is mostly men) who call themselves “cloud chasers” gather in rooms with tampered contraptions and compete to see who can generate the biggest fogs of vapour (“It’s judged on girth, size, length and overall density,” a vaper told reporters during the recent X Games of Vaping at New York’s Henley Vaporium.)

The new world of vaping seems to be one of unpolluted delight and profit, its customers and manufacturers united in their enjoyment of its various riches. At least that’s how it seems until I attend eCig London, an industry summit held earlier this month.

“Can I vape in here?” I ask the person who hands me my pass.

“Of course!”

“Excellent,” I say, pulling my navy shisha from my pocket. (I’ve moved on to blueberry now. It’s delicious.) But when I enter the large conference room, my mood of joy immediately vaporises. There are people in business suits from all over Europe, sitting around circular tables, looking harried. I sit next to a man with a Scandinavian accent called Tomas. On his notepad he has written, in deep, page-scoring ballpoint, two bullet points: “advertising authority” and “hostile environment”. The conversation Tomas is leading concerns the new EU Tobacco Products Directive, which will come into force in May 2016. From there on, e-cigarettes will have to comply with as yet unconfirmed manufacturing standards. The UK’s electronic cigarette industry trade association is trying to influence these, by working up their own with the British Standards Institute. New advertising rules will also come into force. “There’ll be a total ban on cross-border advertising,” Tim Phillips of industry-watcher ECigIntelligence tells me. Potentially, that means no promotion on television, the internet, even print titles that could feasibly be exported. “Technically, that means all advertising except in shops. Although there might be a legal argument to say we could manage advertising to ensure it doesn’t cross national borders.”

The manufacturers seem to be in a panic. “We have only about 20 months in which to manoeuvre, so we’ll need to act quickly and act smartly,” James Cullinan, chief executive of SwissVapour, tells delegates. Meanwhile, Big Tobacco has entered the market late and somewhat reluctantly, buying up existing brands or patents. Tobacco firms tend to plaster their own electronic products with terrifying health warnings that, some observers suspect, are an attempt cynically to play up fears of vaping’s potential harm and put switchers off. A morning session wondered if vaping was on the verge of driving cigarettes off supermarket shelves.

There was a further threat under discussion: the treatment of e-cigarettes that deliver more than 20mg of nicotine per ml as medical rather than consumer products. “The tests required for regulated medical products mean nearly all e-cigarettes would be off the market,” Phillips says. “Each takes two years, and is £1m, ballpark.” So if a company has 10 products, that’s £10m on testing? “Potentially.”

This feels like an industry under siege, I say. “It is. And there are bad things happening in terms of public perception as well. The number of people who think e-cigarettes are as dangerous or more dangerous than cigarettes has doubled from last year to this.”

Indeed. British newspapers have reported tests on rogue devices that contained antifreeze, or produced 10 times more of the carcinogen formaldehyde than tobacco cigarettes. This summer, the BBC banned vaping throughout its offices, as did the Wetherspoon pub chain. The Odeon and Empire cinema chains count vaping as smoking. You can’t vape in public in New York, or Vancouver, or Mexico, or western Australia. In the UK, you’re not allowed to do the dragon on most trains, buses or aeroplanes. Officially, at least. “It’s almost impossible to enforce,” Vapestick’s Michael Clapper told me earlier. “I could be sat puffing away and, within 10 seconds, there’s no smell left to provide evidence of a crime.” So you could vape in an aeroplane toilet? “I’d never suggest anything like that publicly. Certainly not in the Guardian. All I’ll say is that it’s not smoke, so it’s not going to set off a smoke alarm.” He adds that his trips to the cinema (his local is not an Odeon or Empire) are suddenly “entirely enjoyable again”.

The e-cig makers are in a panic. ‘We have only 20 months to manoeuvre. We need to act quickly,’ says SwissVapour’s boss. Model: Esma Aydin at Ugly. Location: Draft House Birdcage, London. Photograph: Manuel Vazquez for the Guardian

One of the most insistent voices arguing against e-cigarettes has been the World Health Organisation, which has called for a ban on vaping indoors, citing evidence that “suggests exhaled e-cigarette aerosol increases the background air level of some toxicants, nicotine and particles”. At eCig London, Tim Phillips dismisses this: “The WHO reflects the views of its 180-odd members, who are in the majority government agencies who don’t know much about e-cigarettes. It’s mistrusted because it’s a new technology.”

For an independent view, I call Professor Robert West, director of tobacco research at University College London and one of the UK’s foremost experts in smoking. He surprises me by saying the WHO’s health fears seem to be largely misplaced. Vaping isn’t smoking. It’s the act of burning, he says, that releases the cascade of toxins. “On the science, we’d say there are no grounds for banning it in public because there isn’t a risk to bystanders.” And what about the user? Critics cite the lack of long-term studies on the effects of vaping as cause for anxiety. But even if we could leap forward 20 years, these would be extremely difficult to carry out. “Almost everyone who’s vaping has smoked and many of them still do,” West points out. “How do you tease apart the effect of the vaping from the smoking?”

West believes we have to rely instead on the products’ toxicological profile. “What’s in it? Obviously, the water vapour is fine. Then you’ve got propylene glycol, which is stage smoke. That’s been tested. It does have some irritant properties, but nothing like cigarette smoke, and it doesn’t have the high level of carcinogens. The nicotine is not totally harmless by any means. I’d say, worst-case scenario, they probably carry a 20th of the risk of conventional cigarettes. Best case? Probably a hundredth.” As a smoking cessation device, he says, they’re “quite effective. They’ve probably helped around 20,000 smokers in England stop, over the last year, who otherwise would have carried on. It’s a small proportion, but it’s still 20,000 people.”

But what if e-cigarettes became so fashionable that they began to attract users who had never smoked? At the moment, these people make up just 0.14% of British vapers. They’re so rare, in fact, that I had to go to Hawaii to find one. Chuck Lasker is the 52-year-old owner of an online marketing consultancy who was, at first, concerned when his son began vaping. “I thought nicotine was the dangerous part of cigarettes,” he says. One day, the scent of chocolate doughnuts started pouring out of his son’s head in big delicious clouds. “It smelled good. He asked if I’d like to try it.”

Recently, Lasker has been dieting and vapes sweet e-liquids instead of snacking. “I used to have a Starbucks frappuccino every afternoon as a pick-me-up. I don’t need one any more.” Although he can’t tell how much of his achievement is down to the vaping, he’s lost 8kg in six weeks. And even though he’s now a regular user of nicotine, he insists he’s absolutely, definitely not addicted to it. “I vape with very low nicotine.” How often? “My vaporiser sits next to me while I work,” he says. “I generally vape all day.” So almost constantly? “Yes.” He and his son even mix their own e-liquids in their kitchen. “I’m vaping our coconut cream pie right now.”

Could sweet-puffing Lasker be a vision of the future? Won’t all those ambitious e-cigarette entrepreneurs I met last week want to keep expanding their customer base? “It’s not happening at the moment, but it might,” West says. “And we know enough about the way the market works to be concerned. Every company seeks to maximise its profits.” West approves of the current UK advertising guidelines, which say that vaping can’t be glamorised, but Hazel Cheeseman, director of policy at Ash, is more cautious. “It remains to be seen if the advertising rules will protect non-smokers and young people from marketing,” she says. “In places, we feel they could go further. We don’t think celebrity endorsement of these products is appropriate.”

Earlier this year, Vapestick hired actor Mischa Barton to judge a competition to find Britain’s vaping style icon, who will feature in further advertising; there have been heats at festivals and events throughout the year, with a winner announced today. Branding consultant Rebecca Battman tells me the e-cigarette industry’s greatest boon has been the destruction of the image of traditional smoking. “It’s done well because there’s been a massive cultural shift,” she says. “Tobacco smoking is now understood to be a very negative activity, and not only for health reasons. There’s a social stigma, too.” The design of the new devices, from masculine chrome pipes like luxury motorbike spanners to delicate diamanté bling-sticks, helps, too. “Everybody’s intrigued by really good design. I’d rather somebody watch me smoking a rather cool e-cigarette product than a dirty, boring traditional cigarette.” But she suspects the companies that insist they’re not interested in attracting non-smokers are being disingenuous. “They’re conflicted in their stated intention, which is to help people give up smoking, and in the way they choose to market their products, which is by having beautiful, glamorous people using them.”

The first ad to show an e-cigarette being used was shown in a break during ITV1’s Grantchester last month. A beautiful twentysomething woman in a tight black skirt stared at the camera, lips slightly parted. In the background, a heart thumped rapidly. “You know that feeling? When something’s great? You can touch it…” She ran her fingers slowly along her upper thigh. “Hold it. Even see it. Well. Now you can taste it.” Then she vaped, luxuriantly, on a flashy chrome tube.

This baffling ad was the work of 438 Marketing in Knutsford, and was made for Vapestick’s sister company, VIP. There were complaints. A revised version was screened earlier this month, minus the e-cig, in a break during I’m A Celebrity… This time there were cries that the ad crudely referenced oral sex (“I want you to get it out… I want to taste it”). With or without the product, they’re a tricky sell. I call VIP’s Dave Ryder, who admits “the feedback has been mixed”. His only ambition, he says, was to “get across that there’s a solution to smoking available”. I’m not convinced. They’re trying to make them cool. “Not at all!” Ryder says. “The products we’ve got now, I wouldn’t call them cool.” So what word would you use? “Well,” he says, slightly unsurely, “they’re designed with the end user in mind.”

Unfortunately for the reputation of the wider e-cigarette industry, the end users have been having a bit of a problem lately, with explosions. “It always seems to be the same,” says Paul Shaw, investigations officer at the Staffordshire Fire & Rescue Service. “People leave them on charge overnight and they explode. We had one in an NHS hospital. A lady put one in the charger on her laptop and it exploded across the room. There was a death in Derbyshire. A battery exploded and shot hot debris on to a table.” It happens, mainly, when people use incompatible chargers. “I got one to explode myself,” Shaw says. “I put it in a Samsung phone charger and 35 minutes later had a nice little jet engine going off.”

Shaw most recently investigated a terrible fire in Stoke-on-Trent. On 6 November, John Walters had gone to bed at 10pm in anticipation of an early start coach driving the next day. He was asleep when his partner, Carole Poulson, shook him awake. “Someone’s breaking in!” He lifted his head from the pillow. There were eerie banging sounds. They seemed to be coming up the stairs. Walters crept out of bed and reached for the handle of the bedroom door. The moment he opened it, he was hurled back 12ft and smashed against a chest of drawers. The room filled instantly with toxic fumes. “The one breath you take, you know it’s going to be the end,” he says. “The taste of it chokes you. Your throat swells up.”

Pushing himself off the floor, he managed to force the door back over the heat and fumes. At the other side of the room, Poulson had fumbled through the blackness and opened the window. As the flames licked into the room, they managed to climbed on to the roof of the bay window, him naked and her in just a T-shirt. “I was trying to push the window closed but the pressure from the smoke was that much, I couldn’t,” Walters says. “The fire was coming out of it, smothering us.” They were too high to jump down and the danger would reach them at any moment. The only thing that could save them now would be if they had a part-time window cleaner, part-time firefighter living opposite whom they had no idea about.

Luckily, they had a part-time window cleaner, part-time firefighter living opposite whom they had no idea about. He grabbed his ladders from the roof of his van and saved them. “I still don’t know his name,” Walters says. (Note to him: it’s Richard Simpson.) Once down, he tried to force his way back in to rescue his 19-year-old whippet, Sooey. It was too late. They’d lost their dog and their house, and are now living in a Premier Inn. “It was Carole’s e-cigarette,” Walters said. “She’d bought it from the market and used the charger that came with it. Apparently, it spat the battery out, which went underneath the settee.” It was only recently that the couple had started sleeping in the front bedroom. Had they been in the other room, they’d have died. Walters has been having nightmares: “I hear the noises coming up the stairs.”

Fire investigator Shaw believes some manufacturers aren’t doing enough. “I’ve bought a number of e-cigarettes from a number of stores and the information isn’t clear,” he says. Certainly I couldn’t see any obvious warnings on the products Vapestick sent me, and was alarmed that they recommended charging in the USB port of a laptop. If that’s OK, it’s easy to see why consumers would think it equally fine to plug an e-cigarette into a smartphone charger.

The morning after I hear Walters’ story, I wake to find the idea of having a few drags on a shisha presents itself immediately. I’m beginning to worry. It feels like an addiction. But how is that possible? I check the back of one of the 0% nicotine packets they gave me. It says, CONTAINS NICOTINE. In a panic, I email the company. “That should not be on there,” comes the reply. I ask Michael Clapper if they are definitely free of the drug – “100%,” he says.

“But I’m craving them,” I say.

“It’s the throat hit, the visual cues, it’s the feeling of having something in your hand,” he says.

“But I wake up and want a Vapestick,” I say.

“No! Don’t put that in your article.”

“You promise it’s zero?”

“Zero, zero, zero. Not even a trace. It has to be tested. We have laboratory reports.”

The next day, I wake with an area of raw discomfort in my chest. My tongue feels as if it’s been scraped. I have a sore throat. Perhaps it’s the irritant properties in the stage smoke that Robert West mentioned. Perhaps it’s because I’ve chain-vaped while writing this article. As I tip a sachet of sweetener into my daily almond milk latte, it occurs to me I’ve discovered something new that, one day, I’m going to have to quit.