The findings are based on analysis of the sewage of 42 cities over the course of a week in 2013.
Britain’s capital had 711mg of the benzoylecgonine – the main chemical in cocaine - per 1,000 people, almost double of that of its closest rival Amsterdam, which had 393mg, and 233mg in Milan.
Usage in London is apparently highest on Tuesdays.
In total, wastewater from approximately 8 million people was analysed for traces of the drug, as well as amphetamine, cannabis, ecstasy and methamphetamine.
The data, published in the European Drug Report 2014, aims to give a broad view of drug flow across the continent.
Cocaine and ecstasy were more popular in western Europe, with crystal meth more prevalent in eastern Europe.
The Home Office has appeared to downplay the figures, with Crime Prevention Minister Norman Baker saying:“Waste water analysis is an emerging and as such unproven technique for measuring the prevalence of drugs.
"Studies in the UK, including figures from the independent Crime Survey for England and Wales, show that drug usage remains at its lowest level since records began in 1996. We will however continue to review new ideas and techniques as they are developed to ensure the UK has robust systems in place to measure and track drug prevalence.
“The approach towards data collection varies considerably from country to country and as such, it is hard to make meaningful comparisons between different countries' drug prevalence levels.”
Home Office statistics from 2012 say 8.2% of 16-59 year olds had used any drug in the last year compared with 11.1% in 1996.
The study comes shortly after a report found cocaine use in the UK is so widespread it had contaminated the nation’s drinking water.
The Drinking Water Inspectorate data said the levels were not high enough to present a danger to the public.
The report said: "Estimated exposures for most of the detected compounds are at least thousands of times below doses seen to produce adverse effects in animals and hundreds of thousands below human therapeutic doses."
Steve Rolles of Transform told the Sunday Times: "We have the near highest level of cocaine use in western Europe. It has also been getting cheaper and cheaper at the same time as its use has been going up."
The charity DrugScope estimate 700,000 people aged 16-59 in the UK use cocaine every year with 180,000 addicted to crack-cocaine.
The report was highlighted by Labour MP, Jim Dobbin, who has called for closer monitoring to minimise the effects on consumers.