Review will look at 'depenalisation' in Portugal, but home secretary rejects MPs' call for rapid royal commission on reform

An international "what works" study of drug laws, including Portugal's policy of scrapping criminal penalties for personal possession, has been ordered by the home secretary, Theresa May.

But she has rejected a call from the Commons home affairs select committee for a rapid royal commission to report by 2015 on how to reform Britain's 40-year-old drug laws.

The international review, to be led by the Liberal Democrat Home Office minister, Jeremy Browne, will include a visit to Portugal where the policy of "depenalisation" with its strong emphasis on getting users into treatment rather than jail clearly impressed MPs. The Portuguese policy stops short of decriminalisation as trafficking and dealing in drugs remain illegal and subject to strong police enforcement action.

The study will also look at the effects of the recent decisions in the American states of Washington and Colorado to legalise marijuana for recreational as well as medicinal use. It will also look at the international response to the rapid emergence of new psychoactive drugs or "legal highs" which have been appearing on the market at the rate of more than one a week.

The move represents a significant official acknowledgement of the recent shift in the Westminster consensus towards drug policy reform, as well as the more radical approach of the Lib Dem ministers in the coalition.

"The government does not believe there is a case for fundamentally re-thinking the UK's approach to drugs – a royal commission is simply not necessary," says May's official response to the MPs.

"Nonetheless, we must continue to listen and learn from emerging trends, new evidence and international comparators. In particular we will build on the commitment in the drug strategy to 'review new evidence of what works in other countries and what we can learn from it' and conduct a study on international comparators to learn more from the approach in other countries," says May.

The home secretary's official response says the government has no intention of decriminalising drugs but adds that any debate of alternative approaches should be focused on clear evidence and analysis.

She adds that the review will look at a number of countries that cover "a spectrum of approaches" to drug policy and assess their effectiveness in cutting drug use and reducing harm to individuals and communities. Its terms of reference will include looking at best practice as well as the different legal responses to the emergence of "legal highs". Britain has a system of temporary banning orders for the new psychoactive drugs which remain legal to possess but not sell or import while a full evaluation is carried out.

Browne said drugs were illegal because they were dangerous and destroyed lives and blighted communities.

"Drug usage remains at its lowest level since records began with National Treatment Agency statistics published yesterday showing that the number of heroin and crack cocaine users in England has fallen below 300,000 for the first time," said the minister responsible for crime prevention.

"We have listened carefully to the recommendations made by the home affairs select committee and will shortly undertake an international study to gather evidence on successful approaches that other countries are taking."

Drug reform policy groups, including Release and Transform, both responded to the announcement on Twitter by questioning how open-minded the home secretary could remain while ruling out decriminalisation before the study got under way.