Cameron rejects decriminalising drugs
The idea of a royal commission to consider decriminalising illegal drugs - as suggested by a group of MPs - has been ruled out by the prime minister.
In response to the report by the home affairs select committee, David Cameron said the current policy was working in Britain.
The committee highlighted Portugal's approach, where people found with drugs are not always prosecuted.
It also asked ministers to monitor cannabis legalisation elsewhere.
"Drugs use is coming down, the emphasis on treatment is absolutely right, and we need to continue with that to make sure we can really make a difference, " Mr Cameron said.
"Also, we need to do more to keep drugs out of our prisons.
"These are the government's priorities and I think we should continue with that rather than have some very, very long-term royal commission."
A royal commission is a public inquiry created by the head of state into a defined subject and overseen by a commissioner who has quasi-judicial powers.Legal highs
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.
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 whether the user is addicted or just a casual user.
The commission stops criminal proceedings if a problem user agrees to treatment - but it will also impose penalties on a user if he or she goes 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 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, he or she has no criminal record.
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 habits.
"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 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 drug use was falling, the impact of their use still cost billions and there were questions over whether the international strategy was working.
They said the time was right for a "fundamental review of all UK drugs policy in the international context" and recommended a royal commission be set up with an end-date of 2015.
The Home Office disagreed that a Royal Commission was the correct course of action, saying: "Our current laws draw on the best available evidence and as such we have no intention of downgrading or declassifying cannabis."
However, the Home Office minister Jeremy Browne, a Liberal Democrat, said the government was "open to new ways of thinking".
He told BBC Radio 4's Today programme: "We are open-minded, we think it's a decent, thoughtful, balanced report. We will consider it carefully."