David Cameron has firmly rejected Deputy Prime Minister Nick Clegg's call for a Royal Commission to rethink drug laws and ruled out the decriminalisation of any illegal narcotics.

The Liberal Democrat leader dramatically signalled his split with the Prime Minister on the issue by declaring that Britain was losing the war on drugs and a new approach was needed.

But Mr Cameron said the Coalition Government had already taken necessary action to change drug policy, and there was evidence that this was bearing fruit in terms of reduced levels of abuse.

He said Mr Clegg was "entirely entitled" to advocate further change, but made it clear this was only in the context of the LibDem manifesto.

In an interview, Mr Clegg said the Prime Minister had missed an opportunity by ruling out a Royal Commission on drugs policy when it was recommended in a report by the House of Commons Home Affairs Committee earlier this week.

"If you were waging any other war where you have 2000 fatalities a year, your enemies are making billions in profit, constantly throwing new weapons at you and targeting more young people, you'd have to say you are losing and it's time to do something different," said the LibDem leader.

Mr Cameron told a press conference in Brussels: "I think the Coalition Government has taken a series of good steps and I don't rule out taking more steps, but I don't personally think a Royal Commission is the answer."