LONDON, July 10 — Britain said today that it would relax its laws on marijuana smoking, keeping the use of the drug theoretically illegal but no longer arresting people using it in discreet amounts in private.

At the same time, Britain said it would increase the punishment for marijuana dealing and promised stepped-up drug education and more treatment for abusers. An estimated five million people in Britain regularly use marijuana, and government data show its use has risen sharply over the last 20 years.

The decision, announced by Home Secretary David Blunkett in the House of Commons, provoked criticism from the opposition Conservative Party, and it prompted the resignation of a Labor government official who previously headed Britain's fight against drugs.

The government action followed recommendations of a parliamentary committee that in May said a more-tolerant drug policy would gain greater credibility among young people and help the police direct their resources towards cracking down on heroin and cocaine. Britain has the most drug-related deaths of any country in the European Union, with heroin cited as the principal cause.

The parliamentary committee also suggested relaxing law enforcement involving the dance-club drug ecstacy, but Mr. Blunkett said he had rejected that advice.

The reclassification of marijuana puts it on a legal par with antidepressants and steroids. Possession of the drug would not necessarily be considered an offense subject to arrest. Though the new policy will not be official for a year, any police action from now on will be limited to issuing a warning and seizing the marijuana.

Mr. Blunkett countered suggestions that Britain was going "soft on drugs" by saying police would retain the right to arrest users in "aggravated" cases, like smoking outside schools or in the presence of children. The Home Office emphasized that marijuana cafes where the drug is sold and used openly remained illegal and would be closed down by police.

"It is critical that police can maintain public order," Mr. Blunkett said. "Where cannabis possession is linked to aggravated behavior that threatens public order, the police will retain the power of arrest."

Scotland Yard said it welcomed the reclassification of marijuana combined with the maintaining of discretionary police power to make some arrests. "The retention of police power of arrest will enable the police to have greater flexibility in dealing with incidents on the street," said Andy Hayman, a spokesman for the Association of Chief Police Officers.

Mr. Blunkett insisted that today's move did not constitute legalization of marijuana. "All controlled drugs are harmful and will remain illegal," he said. "We must concentrate our efforts on the drugs that cause the most harm, while sending a credible message to young people."

But Keith Hellawell, an adviser to Prime Minister Tony Blair's government who had served as the chief of Britain's drug war, said the new policy "would virtually be decriminalization of cannabis, and this is, quite frankly, giving out the wrong message."

He coupled his resignation announcement with a strong attack on the policy, saying it would damage communities and lead to more, not less, drug use.

"It's actually a technical adjustment, which in the reality of the law doesn't make a great deal of difference," he said, "but it's being bandied about by people as a softening of the law."

Mr. Hellawell said that there had been an increase in marijuana smoking among young people and that more people were seeking treatment for its effects. "Why on earth, when there are these problems, we change our message and give a softer message, I don't know," he said.

The former chief constable of West Yorkshire, Mr. Hellawell had been named the government's first antidrug coordinator or drug czar as the job was widely known, by Mr. Blair in 1997. But last year he was sidelined by Mr. Blunkett from the $160,000 post to part-time adviser on international drug trade control.

The new police tolerance of marijuana has been in effect on an experimental basis in two London neighborhoods, Lambeth and Brixton. The Conservative leader Iain Duncan Smith visited the Brixton project on Tuesday and told the House of Commons today that residents had told him that the marijuana policy had led to rampant dealing on their streets. He said Mr. Blunkett's plan amounted to "handing over drugs policy to criminals on the street."

Oliver Letwin, the Conservatives' spokesman on law enforcement, complained that "the middle ground of calling it illegal — leaving it in the hands of dealers rather than in legitimate tobacconists or whatever, then turning a blind eye to it — is the worst of all worlds."

Kate Hoey, a Labor Party member of Parliament who represents one of the affected London areas, said the government could live to regret today's decision because of the increasing strength of marijuana being peddled on the street.

"It is a very strong type of cannabis, it's genetically modified, it is not perhaps like people tried 20 years ago," she said. "And we have no idea of the long-term effects of constant hard smoking that some kids are doing now."