Jaap Korteweg's butcher's shop in The Hague trades well on its retro stylings. Outside the old-fashioned glass-and-wooden shop front, there's a sit-up-and-beg delivery bike parked on the pavement and, next to it, the obligatory fibreglass black-and-white cow. Inside, there are marble worktops – one with an old-fashioned meat grinder clamped onto it – rustic blue and white tiles featuring vignettes of Dutch country life, a set of antique-shop enamel weighing scales and a wooden butcher's block, opposite which chiller cabinets are stuffed with chicken pieces, meatballs, mince and smoked bacon.

But look closer, and there's something very un-retro. The butcher's block, rather than being blood-stained and knife-chipped, is pristine; the meat grinder is for show too, filled with beans instead of beef. Even if you don't speak Dutch, the shop's name gives away the biggest break from tradition before you're even inside: De Vegetarische Slager – The Vegetarian Butcher.

This unlikely oxymoron means that nothing in the shop, despite being labelled and heavily marketed to the contrary, contains animal flesh. The packets emblazoned with '100 per cent natural chicken pieces', the 'tuna flakes', the 'minced beef', the 'mackerel salad' and the 'organic sausage rolls' – are all conjured from the raw ingredients of either non-GMO soya or, in a new more sustainable approach, locally-grown lupin beans (like the ones in the meat grinder). And the business is booming: it has expanded from just one shop, when it opened late in 2010, to selling in 180 Netherlands outlets, with 500 supermarkets joining this summer and international distribution underway.

The Vegetarian Butcher makes use of emerging techniques and new recipes to create, they say, some of the most convincing meat replicas ever. And they are not the only ones: an omnivorous New York Times food columnist tasted its flagship 'chicken' and concluded that "taste and mouth feel come very close to the original...", and while I'm visiting the shop, staff are conducting a taste test on the street with the smoked 'mackerel'. Not one passer-by guesses it is not fish. Most surprisingly, a group of Holland's master butchers have agreed to sell the products and help Korteweg and his team understand how to improve the products further still. "They were hostile at first," he says when I meet him. "How did we persuade them? They tasted it." The butchers also recognised commercial potential around the common dinner dilemma where only one person around the table doesn't eat meat.

But who is buying this stuff in such great numbers – and why? As a vegetarian who greets a new substitute meat with disproportionate enthusiasm, I have some inkling. But why the meaty marketing – and what might it all mean for the future of vegetarian food generally: is meat in the 21st century destined to go the same was as fur, where faux becomes the mainstream version?

The global 'meat analogue' industry, as it is rather unappetisingly known, is competitive: three in five adults now eat meat-free food, say Mintel; part of a market that increased by 18 per cent between 2005 and 2010. And the US, home of the unsexily-named but pioneering Tofurky, a roastable, kosher wheat protein/organic soya concoction, is way ahead of the UK: there, 110 new imitation animal products have hit shelves since 2010. A vegetarian neighbour just back from New York "nearly cried with joy" in a Chinese restaurant in Brooklyn with a vegan menu full of sizzling meaty skewers and black-pepper steak – thanks to soy protein and seitan, a wheat gluten product originally developed in China in the early 1960s. "My New York friends can't believe how behind we are in England," the neighbour told me.

Korteweg hopes to help shift the balance in Europe. We meet at the shop, on a grey Hague morning. He's here with the Vegetarische Slager's co-founder and 'concept-maker', Niko Koffeman, who devised the butcher idea. Korteweg, also a farmer, used to be a keen hunter. "I love meat very much," he says, explaining his motivation. "But I had problems with how we produce it." He is passionate about creating products so convincing, that there will be no need to eat real meat. His theory is to cut out the 'middle man' – the animal – from the grain-to-plate story. He is also unhappy with the dairy industry and thinks he can improve on soya milk; soya is also an environmentally tricksy crop, as vast swathes of rainforest are often cleared to grow it. Debates rage about how healthy it is, too: the Asian diet has used soya for centuries, but in its fermented form – which is not, typically, the way it is processed to make fake meat. Korteweg also has ambitions to create a convincing beef steak, and open a vegetarian fishmonger. I ask what he thinks of the challenge thrown down by the American branch of the animal rights charity, Peta; that it will give $1m to whoever can grow in vitro chicken – real meat, but grown in a lab, not on an animal – by 2012. He and Koffeman grin: "But we have [the equivalent] already!"

The Netherlands is perhaps particularly receptive: it is the first country in the world to have a member of parliament for animal rights (Koffeman is a member of the senate for the Party for Animals, and Korteweg's wife is its leader). There are also a lot of animals: "No country in the world has as much livestock as Holland: 500 million chickens and 12 million pigs," says Koffeman. "We are the milkman and the butcher for Europe. And the impact of the animal disease crisis in Holland was very big." (In a 10-year period, swine fever, foot and mouth, avian flu and Q fever, a bacterial infection, resulted in millions of animals being culled.) Koffeman suggests this is why "more than 80 per cent of [Dutch] people now don't eat meat every day".

It's generally accepted that a modern Western diet includes too much flesh: our appetite for a daily fix has led to increasingly intensive farming which impacts not only on animal welfare but also on natural resources, as the average cow consumes up to eight kilos of grain just to produce one kilogram of meat. And that's aside from the debated health issues associated with excessive consumption. Even organic flesh fanatic, Hugh Fearnley-Whittingstall, f whose River Cottage has run butchery courses and published a book called Meat, has promoted the ethical value, and gastronomic possibilities of a vegetarian diet.

"I think he really believes in it, but why go back to eating meat?" asks the Vegetarian Society's Liz O'Neil of Fearnley-Whittingstall's temporary regime. "I don't think he realises the impact his recipes have. [These chefs] might tell us to use ethically-sourced meat – but people buy what is easy and affordable. Only with a vegetarian recipe can you guarantee you're not encouraging anyone to buy factory-farmed meat, or endangered fish."

And Fearnley-Whittingstall is not alone: Simon Rimmer, another omnivore chef, has just republished his recipe book, The Accidental Vegetarian, while Yotam Ottolenghi continues to bring naturally meat-free Middle-Eastern dishes to the mass-market, alongside his harissa beef and sumac roasted chicken. Meanwhile, more encouragingly for O'Neil, London's Vanilla Black recently became the UK's second only meat-free restaurant to be Michelin-recommended, alongside Brighton's Terre à Terre. Paul McCartney's 'Meat Free Mondays' campaign has also gained currency: could fake meat in restaurants the next step?

Joanna Blythman, the food writer and author of What to Eat: Food That's Good For Your Health, Pocket and Plate, thinks not. "Just those two words: 'fake chicken'. Urgh. I do not want pretend anything. Vegetarian bacon, vegan cheese... revolting." Blythman, whose book lays out her '20 principles of eating', continues: "I think vegetarians would eat anything if you told them it had no animal products in it. They don't read labels – they're often [eating]colourings, artificial sweeteners, all sorts of nasty additives – and they don't care. I don't understand this vegetarian preoccupation with making things look like meat. If you want to be vegetarian: like vegetables." It is a good point – and it is not surprising that fake meat mystifies not just omnivores, but many vegetarians. Also, few of the fakes on sale in the UK (see sidebar) come close to real meat – but they do serve a purpose. As The Vegetarian Butcher's Niko Koffeman puts it: "People say, 'Why make it similar to meat?'. And we say, 'Why make yellow balls for your lunch when there is a vacancy [for meat] on your plate?'." I don't eat fakes often, and I do like vegetables, as my organic delivery box confirms. But I'm aware this is a very middle-class way to shop. Besides, there isn't always time to make something from scratch, or fill the cupboard. Which is when a freezer-drawer of Linda McCartney sausages is handy. Also for varying protein fixes – egg, pulses or dairy isn't always what you fancy.

Andrew Dargue, chef of the previously-mentioned Vanilla Black, admits he eats Quorn at home occasionally. "I'm not usually in until midnight; it's convenient." But would he serve a healthy, ethically-produced, delicious fake in his restaurant? "Never," he says instantly. "It'd remove the challenge; kill the creativity".

When I relay Blythman's comments to him, he sighs. Dargue says he finds the prejudice against vegetarian cooking frustrating. And yet he and Blythman's outlooks are probably pretty close: "I try not to think of the word 'vegetarian'," he says. "It creates a barrier. We just use food; flavour comes first. But people still roll their eyes as if you're going to try to convert them." He recounts the reaction from his father, a Teesside man, when he opened the restaurant: "He said, 'I won't be able to come, will I? I don't like vegetarian food.' So I asked him: 'Well, do you like Corn Flakes and cheese on toast? Ever had a mushroom pizza...?' People actually eat a lot of vegetarian food, it's just the label we put on it."

Morgaine Gaye, a food futurologist, agrees – saying that it's about language and branding and image. "It prevents people from eating certain foods. Our relationship to meat is changing for complex reasons, and as meat prices go up and there is more transparency about [production], we are now looking for new ways to fill the meat gap." She sees seitan becoming more mainstream, but is also swayed by another stand-in: "I've talked about [eating] insect burgers for a long time; it will become popular when we get away from the word insects."

Either way, we are very likely to see more and better-quality meat substitutes in the next 10 years, according to Florian Wild, who is leading 'Like Meat', an EU research project geared towards improving fake flesh. "In Western Europe," he says, "meat alternatives are getting a lot of attention." He predicts two trends: on the one hand, the development of "premium products with more fibrous, elastic and juicy textures, with the potential to replace meat in good restaurants". This is the focus of his project.

The other trend he sees is for lower-quality substitutes, which "have the potential to replace 5-10 per cent of today's meat market". He sees potential for these both in the developing world, as well as in the fast-food arena in the form of burgers and nuggets, for example, since they are "very attractive for economic reasons".

But as for the idea that real meat will one day be off the menu? "Wishful thinking by vegetarians," says Blythman. "Intelligent omnivorism," is more likely, she believes: "red meat and fish once or twice a week and everything else plant-based." TheVegetarian Society's findings echo this: "I'd love to say the number of vegetarians was rising," says Liz O'Neil. "Instead it's the numbers of people not eating meat every day." Which is surely, at least, a move in the right direction for vegetarians, ominivores and the planet alike.

National Vegetarian Week begins on Monday

Four top fakers: Kate Burt's taste test

Tivall

Vegetarian Frankfurters, £3.36. A guilty pleasure – as hot dogs should be. Even without squirty mustard, fried onions and ketchup, they're scarily convincing. Best boiled.

Redwood Wholefood

Gourmet Fish Style Steaks, £2.93. An impressively flaky texture; a little like a posh fish finger. Tastes quite fishy but incredibly salty. Resident omnivore was impressed too. Made by the Heather Mills-owned company.

Linda McCartney

Vegetarian Barbecue Selection, £2.50. Soya protein sausages (OK taste, weird texture), burgers (good and pretty meaty) and fillets (urgh: like Eighties school-dinner tinned meat fritters).

Quorn