Professor David Nutt says his laboratory now has funding to research a chemical found in magic mushrooms, psilocybin, to treat depression.
But he says "insane" regulations mean he cannot get hold of the drug.
The Home Office said there was "no evidence" that regulations were a barrier to research.
It is not the first time Prof Nutt has been at odds with government policy.
He was sacked as an adviser over views that ecstasy and LSD were less harmful than alcohol.
Psilocybin is illegal in the UK and is a Class A drug.
Earlier research at Imperial College London showed that injections of psilocybin could calm a region of the brain which is overactive in depression.
The group is now trying to conduct a clinical trial to test psilocybin as a treatment.
Stumbling block
The UK's Medical Research Council has given the lab a £550,000 grant to test the idea - in 30 patients who have not responded to at least two other therapies. They have also been given ethical approval.
However, there are more stringent regulations for testing the drug as a treatment than in earlier experiments. As a potential medicine it must meet Good Manufacturing Practice requirements set out by the EU.
"It hasn't started yet because the big problem is getting hold of the drug," said Prof Nutt. He said finding a company to provide a clinical-grade psilocybin had "yet proved impossible" as none was prepared to "go through the regulatory hoops".
"So we are between a rock and a hard place, which is very unfortunate, because if this is an effective treatment for patients then they're obviously being denied that possibility so one of the things we have to do now is have a more rational debate about the way the drugs laws are being implemented."
He will tell the British Neuroscience Association that similar rules are hampering research into other drugs such as ecstasy and cannabis.
Ahead of the meeting he told the BBC: "We have regulations which are 50 years old, have never been reviewed and they are holding us back, they're stopping us doing the science and I think it's a disgrace actually."
A Home Office spokesman said: "Our licensing regime enables legitimate research to take place while ensuring that harmful drugs don't get into the hands of criminals.
"We have no evidence to suggest that the current listing of psilocybin as a schedule one substance is a barrier to attracting funding for legitimate research."
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