Could ketamine, that notorious party drug, treat depression? It seems so. Results of a new trial have just been released and doctors say the effects are surprising and dramatic. Twenty eight people were slowly injected with a low dose of ketamine – all seriously depressed patients who didn't respond to conventional treatment. Eight reported feeling better and four improved so dramatically that they were no longer classed as depressed at all. One went for a walk on her own for the first time in 10 years; some remembered that this was how they used to think, and relatives said they had got their loved ones back.

Some people seem surprised that an illegal street drug can have such positive uses, but they should not be. Indeed, many other popular recreational drugs have valuable therapeutic potential. But our system of prohibition makes it incredibly difficult to do research with these drugs, and falsely demonises them.

Ketamine – often known as K or "Special K" – is basically an anaesthetic, though it is used more often on cats and horses than adult humans because of its peculiar side-effects. In high doses it causes paralysis and anaesthesia, but in low doses it causes hallucinations, euphoria, time distortion, synaesthesia, and strange dissociative effects. I have had ketamine only once. I wanted to try it, in safe conditions, because of my work on out-of-body and near-death experiences, and the claim that K could induce them. I was injected with a dose just below that required for unconsciousness, and the effects were dramatic. I did indeed feel as though I was not part of my body. I was paralysed except for my eyes, struggling to make sense of anything; experiencing strange visions and hearing every tiny sound as though it filled my head. But although this was fun and interesting, I concluded it was nothing like the spontaneous out-of-body experiences that I and many others have had.

So why does it affect depression? Previous studies on rats identified the receptor in the brain on which ketamine acts, and showed that blocking this receptor reduces background activity in the brain. This, some argue, is similar to the effect of electroconvulsive therapy, which is extremely unpleasant and now rarely used even though its effects on lifting depression can also be dramatic.

More commonly used antidepressants, such as Prozac, work to increase levels of serotonin in the brain. Among their disadvantages are that they do not work for everyone, have unpleasant side-effects, and even when they do work, can take weeks to take effect and to wear off again. This is why a quick-acting antidepressant would be so valuable. In this new study, some patients experienced unpleasant side-effects during the slow infusion, but not after it stopped, and the positive effects began quickly, lasting anything from six hours to nine months with most lasting about two weeks. In a previous trial, half the patients improved within two hours and by the end of the first day over 70% were better and nearly 30% symptom-free. Another small study showed similarly dramatic effects on bipolar disorder.

These results are good news indeed, but should we be surprised? No. All drugs have multiple effects and any psychoactive drug as powerful as ketamine is bound to have unexplored potential. The sad fact is that when any drug is found to be fun – for partying, for pleasure or even for spirituality – it gets stamped on and made illegal. Once that happens, research is made incredibly difficult and the potential of the drug is ignored. This has been tragic in the case of LSD, which is perhaps the most feared and demonised of all psychoactive drugs. Through its power to transform the mind it has long been known to release the terminally ill from anxiety and help them to die more peacefully. Aldous Huxley was given LSD on his deathbed. Now, at last, the first trial for more than 40 years has confirmed this, and there is hope that LSD's potential can finally be appreciated. Organisations such as Maps and the Beckley Foundation are, against the odds, pioneering research on the therapeutic potential of cannabis, ecstasy, and psilocybin among others. It is long overdue.