The war on drugs has failed and it is time to decriminalise and regulate narcotics, Richard Branson told MPs on Tuesday.

Giving evidence to the home affairs select committee, the business tycoon said treatment was better than criminalisation and called for the UK to look to countries like Portugal.

"10 years ago they had a massive drug problem. Heroin was rampant and they decided to move drugs from the home office to the health department, the Virgin head said.

"Not one person has been sent to prison for taking drugs in the last 10 years."

Branson, asked if he had taken drugs, claimed that "50% of my generation have smoked cannabis... 75% of my children's generation smoked cannabis."

When asked about his health he said: "If I was smoking cigarettes I'd be extremely worried."

His comments prompted one member of the committee, Labour MP David Winnick, to "confess" that he had never taken illegal drugs.

Keith Vaz, the chairman of the committee, replied: "Can I say to members of the committee there's no need for further confessions. One is enough."

Branson told the committee that drugs should be regulated: "Three people died in hospital recently from taking [what they thought was] ecstasy… the kids didn't know what they were taking. At the moment it's a completely unregulated market with nobody checking up on what our kids are taking."

Branson is a member of the 19-person Global Commission on Drug Policy, which also includes former United Nations secretary general Kofi Annan.

He told MPs he would "not necessarily" fire an employee who was taking drugs, but would attempt to give them help: "There are people within every company who have got drink problems, there are people addicted to smoking, there are people who maybe take too much marijuana."

Speaking to the BBC after his appearance, Branson challenged David Cameron to be "brave": "David Cameron 10 years ago he was on a select committee where he argued exactly what I'm arguing… He's got to be brave as prime minister and you've got to do what's right for the country."

The Home Office has already said it has "no intention of liberalising our drugs laws".