Forty years ago Mary Finnigan stashed some cannabis in her handbag while researching a story on drugs. It was a mistake that would alter the course of her life ...

Larry and I took the tube to Shepherd's Bush - me in Biba mini-dress, he in crushed velvet bellbottoms, floral shirt and magician's cloak. I was enjoying his company and by the time we reached our destination I was in a cheerful mood. Larry plunged towards a basement doorway. As it opened we were welcomed into what seemed like a dream world from Hindu mythology. There were low lights and candles, mirrored hangings and gaudy pictures of Buddhist deities. Rose and sandalwood incense perfumed the air, mingling with a more acrid aroma, which even in 1967 I recognised as dope smoke. A raga tinkled from column speakers and in one corner, a chap with shoulder-length blond hair played along on a sitar.

Bemused and feeling somewhat square, I wandered from one room to another and in each the scene was much the same. The girls wore floaty hippy ensembles, the blokes velvet bellbottoms, beads and baubles. Some couples were entwined in overtly sexual embraces. Most were in their late teens or early 20s.

There was a tap on my shoulder:

"Did you come with Larry?"

I nodded - in the dim, smoky light discerning an older man in more conventional attire.

"I'm Pete," he said. "Larry says you want to score."

I said "yes please" and he asked "how much?" and "hash or grass?" I hadn't a clue, so I made a guess: "Oh ... er - grass will do fine, thank you, and about three quid's worth?" I wanted the photographer to take a picture of it for my report.

Pete vanished, to return a few minutes later with a 35mm film canister. I lifted the lid and sniffed the contents. It was extremely pungent.

"Good stuff," said Pete the dealer. "Durban Poison."

At this point I made a mistake that would alter the course of my life. Instead of keeping the canister in a pocket, I buried it deep inside my shoulder bag. A few moments later a blow smashed open the front door and a loud voice shouted, "Police - nobody move."

All around me people were emptying their pockets - I spotted Larry tipping a bagful of marijuana on to the floor. I was frozen in terror - body and brain immobilised. A detective barged into the room, switched on the overhead light and barked at us to form an orderly queue.

One by one we were marched into the kitchen to be searched. When my turn came, I extracted the film canister from my bag and handed it over - explaining my mission and the provenance of some prescription medicine I was carrying. The police officers were underwhelmed. I could see "a likely tale" from the expressions on their faces.

It turned out that only Pete and his two flatmates plus one other woman and I were arrested. Larry vanished into the night with a horror-stricken glance in my direction. I was charged with illegal possession of herbal cannabis and as yet unidentified pills - despite the fact that they were in a prescription bottle with my name on it. Some time after midnight a friend arrived to bail me out. He drove me to my home in the suburbs, where I lived with my two young children and a Swiss au pair. At the time my life was rooted in middle-class mores. I had no idea how drastically this was about to change.

I was sure the charges against me would be dropped but it soon became clear that this was not the case. My medicine was analysed and found to contain small quantities of amphetamine. The pills stayed on the charge sheet. My doctor promised to exonerate me.

It transpired that Pete and his flatmates were big-time dealers. Kilos of hashish and marijuana and several hundred doses of LSD were found in the flat. The police had been watching the premises for weeks - it was my rotten luck they chose to pounce when they did.

On December 19 1967 I surrendered to bail. I had one brief meeting with my counsel, believing he had been comprehensively briefed by my solicitor. This confidence started to drain away when the prosecuting counsel turned his attention to me. His words were loaded with factual error. He claimed the police had "found" the film canister of cannabis, whereas I had volunteered it. He claimed I had not mentioned that my pills were on prescription. My counsel failed to challenge these errors and nor did he call my photographer colleague to give evidence in my favour.

I found myself remanded in custody to Holloway prison. By the time the court reconvened the following week I was a bewildered wreck. Before my arrest I had tried only a toke or two of cannabis. I had never been anywhere near psychedelic drugs. I pleaded guilty because technically I was guilty of possession. I was also guilty of extreme naivety. I don't think the judge recognised the difference between the 106 grains of herbal cannabis I was charged with and the kilos found in the flat. When he sentenced me to nine months in prison, I fainted into the arms of a prison officer.

A friend came to visit me in Holloway, shortly after my conviction. He told me to appeal against the sentence, dismiss my existing legal team and instruct a solicitor with experience of drug cases, recommended by the counselling service Release. Nine weeks passed before my case was heard at the court of appeal. During that time I spent three weeks in Holloway and six at an open prison called Hill Hall. The former was relentlessly grim. Hill Hall was an altogether different institution, with an atmosphere that reminded me of boarding school. I was given a plum job, working in the gardens. On February 14 1968, I was planting tomatoes in the greenhouses when the governor's assistant came striding by. When he told me I was free, I threw my bucket of compost into the air and danced with delight. I was granted an absolute discharge.

After my release I went to Switzerland to ski for a couple of weeks and took with me a small nugget of hashish. One of my pleasures was to smoke a joint in the chairlift then slip weightlessly over the crystalline slopes as the sun rose over the Alps. Those moments were a celebration of freedom - and an acknowledgment that a miscarriage of justice had turned me into a criminal.

I had been born into comfortable bourgeoisie in Manchester and had barely touched on the drug culture before I was busted, but the hippies and freaks I met between my arrest and imprisonment became friends who remain to this day - artists, poets, musicians, political activists, filmmakers and entrepreneurs. They turned me on to a whole new cultural landscape, and I became painfully aware of my conventional mindset. Over the months following my release, my lifestyle changed from respectable bourgeois single mother into hippy dropout. I joined CND and became fascinated by oriental cultures and religion. I went to meditation classes and transformed the family diet from meat and two veg to tofu and brown rice. I took a full-time job, but gave up after a year: alternative life was just too attractive.

One afternoon I was sunbathing in the garden of my flat in Beckenham, south London, under the influence of a dose of tincture of cannabis. The domestic chores were done and the kids were at school. Some very interesting music reached my ears from the top-floor flat.

"Who's playing?" I called.

A pale, thin face with a halo of blond curls appeared at the open window. It belonged to a young musician called David Bowie. I invited him to join me in the sunshine and the tincture. A week or so later he moved into our flat as a lodger. Our home became a music studio - with amplifiers, microphones and festoons of wiring cascading out of David's room. The children were delighted, they adored David and there were times when both of them bunked off school to hang out with him. He put the finishing touches to his first hit, Space Oddity, during this time, and dedicated the B-side to my son Richard.

Loosening the shackles of respectability was an enthralling learning curve - but it was not always so wonderful for my children. As my lifestyle changed, their needs were sidelined in favour of my great adventure. I frequently abandoned them for extended periods, and hosted loud, all-night parties. My mother and ex-husband were constantly berating me for my wicked ways. At one point my mother called in social services. Eventually the children went to live with their father and I ended up in a squat in north London.

That move signalled another turning point - but this time back towards a more conformist lifestyle. In the squatting community in Kentish Town I had one of the most elegant houses, beautifully restored by my architect boyfriend. Soon after moving in, I became pregnant with my third child, Daniel. When I went back to work I was probably the only person to have an au pair in a squat.

My total commitment to the counter-culture lasted about five years. Today I live an outwardly respectable life in a very nice house in the south-west of England, but I have remained true to the 1960s world view. All three children grew up into intelligent, capable adults. I am still a pacifist, still intrigued by the mysteries of consciousness, and a practising Buddhist in the Tibetan Dzogchen tradition. I still believe all drugs should be decriminalised but I hardly ever use cannabis these days and it's 20 years since my last dose of LSD.

Watching this small area of prohibition collapse like wet tissue paper got me thinking: how does the world of prohibition match up against our gold standards for bad science, like the nutritionists or the anti-MMR movement? Have any of the prominent academic papers been retracted? Yes, they have. Professor George Ricaurte, funded by the National Institute for Drug Abuse, published an article in Science, describing how he administered a comparable recreational dose of ecstasy to monkeys: this dose killed 20% of the monkeys, and another 20% were severely injured.

Even before it was announced - a year later - that they'd got the bottles mixed up and used the wrong drug, you didn't need to be Einstein to know this was duff research, because millions of clubbers have taken the "comparable" recreational dose of ecstasy, and 20% of them did not die. It's no wonder animal rights campaigners manage to persuade themselves that animal research makes a bad model for human physiology.

That's before you even get started on workaday bad science. Like the food gurus, prohibitionists will cherry pick research that suits them, measure inappropriate surrogate outcomes, and wishfully over-interpret data: a prohibitionist will observe that less cannabis has been seized, and declare that this means there is less cannabis on the streets, rather than less police interest.

For textbook bad science we'd also want to see the media distorting research: overstating the stuff it likes, and ignoring stuff it doesn't, especially negative findings. We used to read a lot about cannabis and lung cancer in the papers. The largest ever study of whether cannabis causes lung cancer reported its findings recently, to total UK media silence. Lifelong cannabis users, who had smoked more than 22,000 joints, showed no greater risk of cancer than people who had never smoked cannabis.

While no journalist has written a single word on that study, the Times did manage to make a front page story headed "Cocaine floods the playground: use of the addictive drug by children doubles in a year," out of their misinterpretation of a government report that showed nothing of the sort.

There are even optimists who believe in quick fix treatments for drug habits - the heroin detox in five days, or painless withdrawal in just 48 hours, under general anaesthesia.

Why are drugs such a bad science magnet? Partly, of course, it's the moral panic. But more than that, sat squarely at the heart of our discourse on drugs, is one fabulously reductionist notion: it is the idea that a complex web of social, moral, criminal, health, and political problems can be simplified to, blamed on, or treated via a molecule or a plant. You'd have a job keeping that idea afloat.

Dancefloor drugs dismissed as merely recreational may have medicinal benefits - helping patients to get the most out of therapy. David Adam investigates

The lecturer was Timothy Leary, better known as the 1960s drug guru who urged America's youngsters to "turn on, tune in, drop out". Leary believed that hallucinogens could alter behaviour in unprecedented and beneficial ways, and in experiments at Harvard he doped graduate students with psilocybin - the active compound in magic mushrooms - and LSD.

He argued that the results of his experiments could help to treat alcoholics and reform criminals; but they enraged parents and unsettled colleagues. Harvard sacked Leary and his colleague Richard Alpert (later known as Ram Dass) in 1963 and the episode has left an embarrassing stain on the university's reputation ever since.

Now, more than 40 years later, research using psychedelic drugs is returning to Harvard.

John Halpern, a psychiatrist at the university's McLean Hospital, is set to study whether a compound called MDMA can help ease anxiety in terminal cancer patients. MDMA - or to chemists 3,4-methylenedioxymethamphetamine - is better known as the dancefloor drug ecstasy.

The study is the latest example of revived interest in the medicinal properties of controlled hallucinogenic or psychedelic drugs, loosely defined by their ability to alter perception, cognition or mood. Some researchers place MDMA in a different class, the empathogens, because it influences emotions.

Trials of MDMA for post-traumatic stress disorder are already under way in America, and psilocybin is being tried for anxiety and obsessive-compulsive disorder. There are even moves to reintroduce research on LSD at Harvard, where Halpern wants to test its abilities to treat cluster headaches - severe attacks that strike at the same time each day for weeks at a time.

"Drugs can be controlled but that doesn't stop them being useful," Halpern says. "That's what doctors are supposed to focus on and that's what I'm trying to do. The Leary connotations are understandable for a popular culture that is still struggling to resolve what happened in the 1960s.

"Let's face it, it was a huge fiasco back then, but Tim Leary was not a physician and didn't come to this from a medical approach."

Halpern's MDMA trial is different: 12 cancer patients with less than a year to live will be given varying doses under controlled conditions and strict supervision. Crucially, the trial was given the green light by several ethical review boards and approval from the US Food and Drug Administration (FDA) in December. One hurdle remains: Halpern has yet to receive a licence from the Drug Enforcement Administration (DEA) to handle the drug, though he expects to obtain one within weeks.

The ecstasy is not a chemical fix for the patients' anxiety, instead it is intended to help them to open up and get the most from conventional counselling. Halpern says the drug allows people to talk about topics they would otherwise avoid.

"It's really tough doing psychotherapy with people who have anxiety disorders because when you get to the heart of the matter it causes a panic attack. For somebody who has a particularly gruesome time trying to talk about important end-of-life issues it bubbles into anxiety and nothing gets achieved," Halpern says.

"MDMA may be potentially useful in that it doesn't induce that reaction. We want to see if that can translate into decreased anxiety and meaningful increases in the quality of life for these people."

The alternative, he says, is heavy doses of sedatives such as Valium. "At the moment these people have a choice of being over-sedated and not having anxiety or being alert and suffering panic attacks."

Patients volunteering for the trial will receive up to 125mg of MDMA over two experimental sessions several hours apart - about the same or a little more than in a typical ecstasy tablet. They will also receive more conventional help during several non-drug sessions. Psychologists will assess their mental state before and after the trial to judge whether the drug has helped.

Rick Doblin, the founder and head of the Multidisciplinary Association for Psychedelic Studies, which funds the Harvard research, says the study could bring one step closer his goal of making MDMA a prescription medicine.

"It's going to be a hurdle but as we get pilot studies that show promise I think it will get easier and easier to raise money for the research," Doblin says. "A lot of people think what we're trying to do is impossible and so don't bother to help out. Now we've shown that it is possible."

His group is funding the world's only current clinical trial of MDMA. At his South Carolina clinic, psychiatrist Michael Mithoefer has given the drug or a placebo to victims of rape and sexual abuse who suffer from post-traumatic stress disorder. The trial started almost a year ago and five of a total of 20 patients have been treated so far. Two more - the victim of a random shooting and a police officer involved in a violent incident - are lined up, and Mithoefer is preparing to extend the study to American soldiers traumatised by fighting in Iraq and Afghanistan after receiving permission from the FDA.

The research is controversial and getting it off the ground proved difficult. The FDA originally approved the South Carolina study in November 2001 but insisted that Doblin's group also get permission from an independent ethics review board; these oversee research and are usually attached to universities. The first seven applications to separate boards were rejected because of fears of legal action, experimental bias or in some cases with no explanation at all.

The dangers of ecstasy remain uncertain. In 2003, researchers at Johns Hopkins School of Medicine led by George Ricaurte were forced to retract claims that a single tablet could cause irreversible brain damage and even death in monkeys after they discovered a labelling mix-up meant they used the wrong drug in their experiments. Just 18 days later, the South Carolina trial got the go-ahead from its eighth ethics review board.

But significant doubts over the long-term risks of MDMA remain: animal studies show that it can lower levels of the neurotransmitter serotonin. It is difficult to judge whether similar changes occur in the brains of human users - though there is indirect evidence to suggest they do - and there is little evidence on what long-term effect, if any, this could have.

Some politicians and anti-drug campaigners have argued that research into the medical potential of illegal drugs presents a false reassuring message about their safety.

Doblin rejects this, arguing that several controlled drugs already have "dual use" and are used both for recreation and medicine. Heroin is routinely prescribed as a painkiller (though not in the US where synthetic versions are used) and cocaine is used as a local anaesthetic for surgery around the nose because it numbs tissue so effectively. "No one has been saying that the rise in street use of methamphetamine is because some kids with attention deficit disorder get prescribed it," Doblin says.

"We have to recognise there is no risk-free strategy. We're not trying to sell what we're doing as the way to solve all the problems with drugs. You look at the people who are taking MDMA for post-traumatic stress disorder and you would say that's the opposite of ecstasy. They're crying and shaking. They're not saying 'Oh I'm so happy and I love the guy who did this to me,'" he adds.

Some people who take ecstasy in clubs break through emotional barriers to memories of childhood or other abuse, he says. Deliberately suppressing these feelings if they feel unable to talk about them with their friends at the time can then make the situation worse. "I think that's the real risk of MDMA, more significant than the few cases of people who overheat and die and drink too much water and die."

The results of the South Carolina trial are expected at some point next year. Doblin says the next stage will be two larger trials involving hundreds of people: one would take place in the US and the second probably in Israel or Spain, where smaller studies are already planned.

Jose Carlos Bouso of the Autonomous University of Madrid started his own study of MDMA for patients with post traumatic stress disorder in 2001. Spanish drug-enforcement officials halted the work in 2002 after political pressure, but Doblin is hopeful that it will restart soon.

It's not just interest in MDMA that is on the rise. Francisco Moreno at the University of Arizona at Tuscon is currently writing up the results of a trial of eight people with obsessive-compulsive disorder treated with psilocybin. Psychiatrist Charles Grob at the University of California, Los Angeles, is also testing psilocybin, to relieve anxiety in terminal cancer patients.

Elsewhere, a team at the Orenda Institute in Baltimore has asked the FDA for permission to give cancer sufferers LSD and a Russian group in St Petersburg led by Evgeny Krupitsky are investigating whether heroin addicts can be helped by treatment with the psychedelic drug ketamine, which is commonly used as a horse tranquilliser.

A small clinic in Peru is also treating drug addicts with a hallucinogen - the native brew Ayahuasca, which is unusual because it contains dimethyltryptamine or DMT, the only psychedelic compound our bodies produce naturally.

Mithoefer, who leads the South Carolina MDMA trial, says it is too early to tell if the compound has clinical benefits, though the early signs are good. "The trend that we're noticing so far is that people are able to connect more deeply on an emotional level with the fact that they are safe now."

The trial is double-blind - meaning neither the patients nor the scientists know who has been given the MDMA - but Mithoefer says there are several tell-tale signs, not least that pulse rate and blood pressure increase.

"It's a little hard to describe, there's just a real sense of somebody having a new experience and connecting with their trauma."

Each drug-assisted session lasts about eight hours, during which patients lie down and music is played - though psychedelic classics such as the Beatles' Sergeant Pepper are out. "None of that stuff, because it has lyrics," Doblin says. "Lyrics plant images into people's minds and we really want people to be free to bring up their own content."

Halpern at Harvard hopes to get his trial of MDMA in cancer patients under way by the spring. "If it doesn't work then I'll feel bad about that but I'll get another paper published and that will further my career and I suppose that's nice," he says.

"But if it [MDMA] does help it should be compelling, and that shouldn't be thrown away because of the controversy over how some people end up abusing it."

Researchers said the study proved that some users of the class A drug can find work, hold down a job and achieve educational qualifications which compare to non-drug users.

The study was based on 126 long-term heroin users who were not in treatment recruited in Glasgow over a four-year period. All had used opiates at least 10 times in the past two years, and had been using heroin for seven years.

Of those users, the majority were married, 74% were employed and 64% had gone into higher or further education. Only 5% had no educational qualifications and 15% were unemployed.

David Shewan from Glasgow Caledonian University, who carried out the research with colleague Phil Dalgarno, said the findings exposed a hidden population of drug users who have previously been ignored.

He said: "The important thing about the study is that it shows while there are heroin users with problems, there