The unintended consequence of this week's media coverage of mephedrone, a legal drug openly sold on the internet which may be implicated in the death of Gabrielle Price, a 14-year-old girl who collapsed at a party in Brighton last month, is that lots of suppliers have sold out. Several I call don't have any in stock. "We've had loads of free publicity," says one. You must be pleased, I say. "You think I'm pleased that kids are buying a potentially dangerous drug?" he says angrily, then puts the phone down. Which is a curious response when he is the one supplying them, but then he, like many other mephedrone sellers, seem to exist in a strange world of non-truths. You can buy mephedrone over the internet with a credit card and have your little bag of white powder delivered the next day (or on the same day in some areas), although when you buy it, you do so on the understanding that it is "not for human consumption" – which every website selling it will tell you – and is instead a plant fertiliser. "I sell strictly for horticultural use," says one supplier. "A lot of orders are for just a few grams, so this is obviously intended for the customer's own garden." Right.

Even though what they are doing is not strictly against the law – under medicines legislation, it is illegal to sell mephedrone for human consumption, but not for customers' gardens – they really are a wary lot. One only agrees to speak by email and under condition of anonymity after deciding not to meet me at a service station just north of London after all. Michael is 39, runs three small "regular" businesses and used to be an IT director for a retail chain. He set up a website selling mephedrone, imported from China, three months ago.

"Someone mentioned it in passing and I was intrigued," he says. "I knew it was an opportunity and I realised on the first day it was going to be a success. Now, I'm seeing silly growth, 10 to 20% every week."

This week he put his prices up, mainly to try to stem the interest because he was receiving more orders than he could handle. He makes all his sales through his website – "I've heard of a few cases recently of robberies taking place at sales meet-ups" – so he says it is hard to know who is buying mephedrone, but he does supply bulk orders to people who clearly plan to sell it on. He says he can almost see it spreading throughout the country. "A month ago it reached London," he says. "I went from rare orders there to a lot. A week ago it reached Manchester and Birmingham. I was wondering why I never got orders from there, but now there are suddenly lots." Does he take it? "No, never have and never will."

Last month, the European Union's drug agency found the UK was the European capital for the online trade in legal highs – nearly half of the websites selling these drugs are based here. Tackling legal highs is a growing challenge for governments. Synthesised in laboratories, often based in China, to mimic the effects of illegal drugs such as cocaine and amphetamines, they fall outside most drug control laws and are openly sold online or in "headshops", those dingy stores you find in most towns that smell of incense and sell smoking paraphernalia and cannabis seeds labelled as "souvenirs".

Mephedrone, which also has street names including meow (after its shortened chemical name MM-cat), is cheap, easy to buy, and doesn't come with the risk of a criminal record. Its status as a "legal high" gives it an air of safety, though this could be misleading. One user tells me it really took off this year among regular drug users because it has become harder to find MDMA, and mephedrone, which gives similar effects such as a sense of euphoria and energy, filled that void. Maggie, a 20-year-old student from London, says, "I've done mephedrone a few times at house parties and club nights. I didn't have that much of a comedown the day after, but I felt spaced out and a bit stupid – I couldn't do any work for a few days." Another student in London says he is planning to buy mephedrone in bulk now so he can sell it on when it becomes illegal – as most predict it will – and make a profit.

Ask people – from users to medical and drugs experts – whether it is safe and they will tell you they just don't know. It is the illegal aspect of other drugs that is putting people at risk by encouraging them to seek out legal drugs instead, says Professor David Nutt, who was the chair of the Advisory Council on the Misuse of Drugs (ACMD) until he was sacked in October by the home secretary, Alan Johnson, for criticising government drugs policy. "I know it's controversial to say it, but people are better off taking ecstasy or amphetamines than those we know nothing about," he says. "Who knows what's in [mephedrone] when you buy it? We don't have a testing system. It could be very dangerous, we just don't know. These chemicals have never been put into animals, let alone humans."

Nutt first became aware of mephedrone a year ago, and he says "legal highs" are something he has been concerned about for a while. More reports, particularly from music festivals this summer, of its use and often frightening side effects started to reach the ACMD, bolstered by reports from hospitals, the police and researchers who take an interest in what gets put into amnesty bins in clubs.

On an internet drugs forum, where thousands of people from all over the world share information and experiences, mephedrone users report experiencing vomiting, nosebleeds (the drug is often snorted), chest pains and high heart rate, breathing problems and panic attacks. One user describes how it turned him blue, another describes "electric shocks in the head". One user writes about a friend going to hospital after taking it and finding the emergency doctors had never heard of mephedrone and didn't know about its effects or how to treat them. The theme throughout many of the threads is the unknown risk aspect.

Mephedrone has already been banned in Sweden (where it was linked to the death of a young woman last year), Denmark and Israel. A spokeswoman for the Home Office says "the ACMD are looking into [mephedrone] as a priority as part of their review into legal highs. They will report back next year and their advice will inform our response". This month, three "legal highs" – BZP, GBL and a cannabis substitute known as spice – will be banned after they were linked to several deaths.

But banning individual substances long after they have appeared doesn't seem like a reasonable long-term response to legal highs, which are easily and quickly manufactured and distributed on the internet. Nutt believes we should follow the model adopted in New Zealand, whereby new drugs are immediately put into a new "class D" category, where it is not illegal to sell or possess but its effects are monitored. "The manufacturers and suppliers can define the dosage, do quality control, make sure it is not contaminated. You can also monitor sales and use this data to see how much is out there – from that you can work out the use/harm ratio." Nutt proposed this to the government as a way of dealing with legal highs in the first instance. "They turned it down. They said they didn't want to take that route at the moment; they wanted to legislate for specific compounds."

Martin Barnes, chief executive of Drugscope, the national drugs information charity, says "we should avoid panicky, knee-jerk responses. To respond that the law should ban [mephedrone] is a blunt instrument. The important issue is education; people need to have access to reliable information. At the moment, it is all word-of-mouth and what people read on internet chat rooms."

As for the suppliers, the feeling appears to be that a ban is inevitable. "I think mephedrone will be made illegal within a year, but there will be other products that will replace it," says Michael. Recipes change – new drugs are made by tweaking a molecule here or there – sidestep the law. "The law will always be one product behind the market."

Additional reporting by Kieran Hill

• This article was amended on 7 December 2009. The original named the chief executive of Drugscope as Martin Byrne. This has been corrected.