The number of soldiers caught using cocaine has risen fourfold since the start of operations in Iraq.
At a time when the military is overstretched on two fronts, the British Army is discharging almost the equivalent of a battalion a year because of illegal drug use, figures published today by the Journal of the Royal United Services Institute.
Experts have warned of an increasing level of combat stress among troops with many turning to alcohol and drugs to deal with traumatic illness. They say personnel are using them to self-medicate and escape an uncomfortable reality.
Professor Sheila Bird, a scientist with the Medical Research Council writing in the RUSI Journal, said: "Repeated tours in Iraq and Afghanistan... may have contributed to the markedly increased positive rates.
"Any recourse to illegal drugs to counter combat stress may also mean that, disproportionately often, drug-discharged service personnel will have mental health problems that emerge in the short or longer term."
Studies into compulsory drug testing of army personnel revealed that there had been a 50 per cent rise in those failing the screening from 517 cases in 2003 to 769 in 2006. But the trend is most apparent for the class-A drug cocaine which accounts for the majority of positive tests.
The rate is up from 1.4 per 1,000 in 2003 to 5.7 per 1,000 in the first part of 2007. In 2006, cocaine accounted for more than half the failed tests (423), ahead of cannabis (221) and ecstasy (95).
Other drugs taken included amphetamines, tranquillisers and, in one case, heroin. Figures up to October indicate that 2007 is following the same trend with 618 positive drug tests: 422 for class A substances, 20 for class B and 176 for class C.
Only last month the MoD confirmed that 17 soldiers from the 5th Battalion The Royal Regiment of Scotland (Argyll and Sutherland Highlanders) tested positive for drugs after a rest period in Cancun, Mexico.
The Tory MP Patrick Mercer, a former army officer, said the increased availability in society and improved testing accounted for some of the rise but so did the additional strain placed on soldiers.
He said: "In the Army of my day operational tours come round say every two years, now they are going round every year. Whilst we came back with one or two dead and couple of wounded, as we saw from the [2nd Battalion, The Mercian Regiment] service the other day, they suffered nine dead and 50 wounded. This puts a stress and strain on people.
"They will alleviate that strain through the use of relaxants, whether alcohol, abhorrent behaviour or use of drugs. We need to recognise that there is tension relief going on and drugs are being used.
While the hardline policy on drugs had served the Army well, the study said, problems with recruitment and retention meant the MoD needed to be sure that its near-zero tolerance approach was the best choice.
While most offenders are dishonourably discharged, there is some flexibility in "exceptional circumstances" when a first-time offender below the rank of corporal is caught using non-class-A drugs.