Daniel, until recently, was a researcher, using his bedroom as a laboratory. His apparatus was his own brain. He bought chemical compounds labelled "not for human use" on the internet, ingested them and waited to see whether he was headed for heaven or hell. At times he wondered if he was going to die.

He was experimenting with novel psychoactive substances – so-called legal highs. These are usually based on banned drugs, such as MDMA or ecstasy, and cannabis. Variations in the formula enable them to be sold legally, but nobody can be sure what effect they are going to have on the user's mind or body – and the doctors dealing with the casualties in A&E have no idea what the substance is that has done the damage or how to treat the patient in distress before them.

Daniel, 23, who lives in London, had some bad experiences. He bought some methoxphenidine. "I believe I took too much – I overdosed on that," he said. He had combined it with another "research chemical" similar to the benzodiazepines such as Valium.

"I have no memory of the night. I remember thinking it wasn't working and I took some more. The next thing I knew I opened my eyes and my parents were sitting there, so worried. I had this large lump in my tongue and it felt as if I'd pulled every muscle in my body, which leads me to believe I might have had a seizure."

Yet he didn't stop then. "I thought I needed to be much, much more careful but it didn't totally put me off."

What finally sent him to the Westminster Drug Project was his realisation of how much pain and fear he was causing his parents – he now has a job and is trying to lead a drug-free life.

Legal highs are regularly banned in the UK, but the process is akin to the game of whack-a-mole. Every time a chemical compound is made illegal, one or more new and legal alternatives turn up instead, sometimes within days.

The trail begins in what Prof Fabrizio Schifano, an expert in drug misuse from the alcohol and drug treatment organisation CRI and Hertfordshire University, calls "rogue labs" that manufacture the drugs, typically in the far east. "A molecule which has been banned today is going to be modified. Tomorrow you have a molecule which is just a derivative and still powerful – but it is legal," he said. Something that is legal has the semblance of safety, he said, giving people a false sense of reassurance. But if things go wrong, the standard urine tests used by hospitals will probably not detect it and doctors are left in the dark.

Home-grown

The chemicals may come from China, but much of the industry is home-grown.

There are people in Britain importing and packaging the drugs and selling them on UK websites. There are warnings everywhere on the sites that these chemicals are for research and not for human consumption, alongside chat about the latest compounds to be banned – or about to be banned – and new ones coming along.

Some of the "researchers", like Daniel, know a bit about chemistry – he did a degree in it. These are the explorers, or "psychonauts", who launch themselves into the unknown as their very own lab rats. The more careful among them set the trail for others, blogging detailed accounts of how long it took for the drug to kick in, what sort of effect it had at certain dosages and the duration – and what were the short or long-term consequences.

"Particularly with a few of the really unknown chemicals I came across, there was a sense definitely of experimenting on myself because there was so little information out there. Everyone reacts differently to different drugs. The less information there is, the more risk there is," said Daniel.

He was looking for compounds that would mimic the effects of the banned drug ketamine, to which he was at one point addicted. "What I found exciting was that they were similar in some ways but different in other ways," he said. "It was a bit of a lottery."

The risks are enormous and the casualties probably higher than most realise. A House of Commons home affairs committee report in December noted that deaths involving legal highs had risen from 29 in 2011 to 52 in 2012, but because users mix their drugs and most drink alcohol with them as well, the cause of death may not always be certain. Other people may suffer harm from not being in control of their mind or their body, even while crossing a road.

It is not just the psychonauts who take these drugs. They are available in what are known as "head shops" in high streets, which sell the legal paraphernalia used with illegal drugs, from tobacco papers to water pipes, as well as herbal incense and little packets of powder or crystal that are "not for human consumption". They have no indication of any strength or dosage. Those who buy in the head shops often have a lot less knowledge of chemistry than Daniel.

Jeremy Sare, director of government affairs and communication at the Angelus Foundation, the only charity focused solely on legal highs, says synthetic cannabis is a big problem. "It arrives as powder and is dissolved into liquid and hand-sprayed on to vegetable matter that looks a bit like cannabis," he said. "It is massively stronger than cannabis or skunk. You get 15 year-olds at school smoking the stuff in the lunch break thinking it is a bit of a giggle – and then you have a fleet of ambulances taking them off.

Black Mamba

"Some varieties of synthetic cannabis have been made illegal – like Black Mamba – but there are dozens of different kinds and they are incredibly strong."

All the experts say the current legal approach is not the answer. "There are record amounts recorded of new substances every year," said Sare. "I think it is old thinking to reach for the Misuse of Drugs Act to say this is a way of stopping production or halting prevalence. Clearly that hasn't worked."

Michael Lawrence, CRI's specialist in novel psychoactive substances, says the legislative sledge-hammer has made the problem worse. "Our approach has led to this situation of new drugs coming out so rapidly. We are in this situation because of our control regulation," he said. He points to New Zealand, which regulated novel psychoactive substances for about nine months. The experiment was controversial, with young people queueing in the streets to buy legal highs from a smaller number of outlets (many head shops closed down rather than work within a regulated system), but the new compounds on the market fell from 300-400 to about 100. Crucially, where things went wrong, hospitals could find out what the patient had taken.

The Home Office said that Britain had done more than any other country to curb legal highs. It has introduced a forensic early warning system to pick up risky new substances on the market and temporary drug orders to ban whole groups of substances immediately for a 12-month period while experts investigate. But the Home Office minister for crime prevention, Norman Baker, into whose remit this falls, is well aware that this is not the whole answer. In December, he announced a review panel, which is expected to report to him in the next couple of weeks.

"I am very concerned about the trade of these substances, which is why I commissioned a review, drawing on the best brains in the country, to see how best we can tackle this challenge," he said. "The review panel is due to give me its report shortly.

"In the meantime it is worth noting that we have in the UK already banned 350 substances and have been quicker to respond to this challenge than most other countries.

"However, I recognise there is more to do, particularly in education and prevention, which is why I have appointed this expert panel."