Media playback is unsupported on your device Media caption David Cameron: ''I don't support decriminalisation''

The government is being urged by MPs to closely consider a system of drugs decriminalisation used in Portugal.

The Home Affairs Committee said it was impressed with the approach to cutting drug use where people found with small amounts are not always prosecuted.

It also asks ministers to monitor the effects of cannabis legalisation in other parts of the world.

The Home Office rejected its call for a Royal Commission on UK drugs policy, saying that was "not necessary".

However, the Home Office minister, Jeremy Browne, said the government was "open to new ways of thinking".

He told the BBC Radio 4's Today programme: "We are open-minded, we think it's a decent, thoughtful, balanced report. We will consider it carefully."

Official figures show that drug use in England and Wales is at its lowest rate under current measurements since 1996.

However, there is concern over the growth and prevalence of "legal highs", some of which are banned, amid a recorded rise in deaths linked to their use.

The committee stops short of supporting a relaxation of legal sanctions for drug use, as suggested by experts at the UK Drug Policy Commission in October, but it does call on ministers to look in detail at the idea.

In its wide-ranging report, the cross-party Home Affairs Committee said MPs had visited Portugal as part of attempts to understand different systems of decriminalisation which were being used around the world to manage the harm of drugs, rather than just hand out penalties for their use.

Portugal has not legalised drugs - but it has a system of not imposing criminal penalties on drug users who enter into special programmes designed to end their habit.

"We were impressed by what we saw of the Portuguese depenalised system," said the MPs. "It had clearly reduced public concern about drug use in that country, and was supported by all political parties and the police.

The Dissuasion Commission: Portugal's answer In Portugal, resources are focused on drug treatment rather than law enforcement. Users of small amounts of drugs don't face a criminal penalty if they attend a "Dissuasion Commission". It establishes if the user is addicted or just casual users. The commission stops criminal proceedings if a problem user agrees to treatment - but it will also impose penalties on a user if they go back to drugs. These include bans on certain types of work and restrictions on the user's movements and whom they can meet. Fines tend to be are reserved for casual drug users because Portuguese experts say it is counter-productive to fine addicts. If the individual sticks with the programme and emerges clean, they have no criminal record. Mark Easton: How Portugal treats drug addicts

"The current political debate in Portugal is about how treatment is funded... not about depenalisation itself.

"Although it is not certain that the Portuguese experience could be replicated in the UK, given societal differences, we believe this is a model that merits significantly closer consideration."

The committee urged ministers to monitor the effect of plans for cannabis legalisation in the US states of Colorado and Washington and in Uruguay,

The MPs said that although drugs use was falling, it said the impact of their use still cost billions and that there were questions over whether the international strategy was working.

"The drugs trade is the most lucrative form of crime, affecting most countries, if not every country in the world," said the MPs.

"The principal aim of government drugs policy should be first and foremost to minimise the damage caused to the victims of drug-related crime, drug users and others."

'Twin approach'

The Home Affairs Committee spent a year examining drugs policy, receiving evidence from almost 200 individuals and organisations.

The report stated that the action currently being taken by international community is not working and the government's position must be informed by a "thorough understanding of the global situation and possible alternative policies".

MPs went on to say the time is right for a "fundamental review of all UK drugs policy in the international context".

The committee's chairman, Keith Vaz MP, said they were not calling for decriminalisation but rather a study of what has worked elsewhere.

"We need to take the hysteria out of looking at drugs policy and look at two very important facts," he said.

"First and foremost the victims - those who are the victims of those who deal in drugs and those who use drugs. And secondly the criminality of those in the system.

"We need to be pretty tough on those who go to prison and acquire the habit of using drugs in prison. We need to make sure we cut down on re-offending but we also need to look at other systems and monitor them carefully.

If the report is to be responsible, it must take account of the specific damage that cannabis can do to the developing brain Marjorie Wallace, Sane

"After a year scrutinising UK drugs policy, it is clear to us that many aspects of it are simply not working and it needs to be fully reviewed.

"We cannot afford to kick this issue into the long grass. We have recommended that a Royal Commission be set up with an end-date of 2015," he added.

The Home Office disagreed that a Royal Commission was the correct course of action.

"Our current laws draw on the best available evidence and as such we have no intention of downgrading or declassifying cannabis," a spokesperson said.

"A Royal Commission on drugs is simply not necessary. Our cross-government approach is working.

"Drug usage is at its lowest level since records began and people going into treatment today are far more likely to free themselves from dependency than ever before."

Marjorie Wallace, the chief executive of the mental health charity Sane, expressed concern about the possible impact on cannabis use.

"If the report is to be responsible, it must take account of the specific damage that cannabis can do to the developing brain, not only as recent studies have shown inducing irreversible cognitive deterioration but in around 10% of cases triggering severe psychotic illness," she said.

However, Alex Stevens, a professor in criminal justice at the University of Kent, said the evidence supported the decriminalisation of cannabis.

"Those countries that have moved towards less harsh enforcement of cannabis laws - and other drug laws - have not seen huge increases in drug use and have been able to reduce the cost of the criminal justice system and the harm that's done by giving people criminal records."