The British public is belatedly waking up to dangers of trans fats - the cheap, chemically treated oils that lurk unlabelled in many processed foods. Alex Renton investigates the ingredient viewed with suspicion even by the junk food-loving Americans

The brick of vegetable fat is tacky to the touch, grey-white and translucent - like the skin on a corpse, I think, but this is unscientific. We are here to test the semi-solid vegetable fat Cookeen against butter and we must be objective. But the butter looks so much prettier on the baker's rolling board: its genteel yellow makes you think of primroses and little-girls' dresses, not of morgues.

Drew Massey, the baker, makes his mind up pretty quickly. "It just doesn't feel right," he says, as he rubs the vegetable fat into the flour and baking powder. "It's really tough." But he smiles when he turns to do the same with the butter. "That's better." When the eggs and milk are mixed in and both lumps of dough are lying like deflated footballs on the board, ready for cutting into scones, Massey tries to articulate the feeling. "I haven't got the words - it's 30 years of doing it that tells you. This one is ropey, tough. It's not going to be a nice product. But this is nice - it's short. There's no pull on it."

Pull is bad and short is good if you are a scone-baker: the scone will have a crumbly texture because the butter has properly coated the gluten molecules, preventing it from making the chains that will result in "pull" - the elasticity you want in bread but not scones. The hydrogenated vegetable oil (HVO) of the Cookeen, by contrast, seems to have penetrated the gluten.

While the two sets of scones bake, Massey reveals his philosophy of ingredients: "I do what my dad did and he did what his dad did."

Massey's father, Ivan, was a traditional master-baker with a chain of shops around Lincoln. He held out against the rise in the 60s of the mega-bakeries, which exploited the new technologies. "He just didn't do any of the new things - no vacuum-processors for the bread, no instant yeasts, no industrial fats - he just didn't see that he was going to bake better."

With these principles as their business plan, Drew and his two partners opened the Manna House in Edinburgh just over a year ago on Easter Road, not the smartest street in central Edinburgh. But despite the presence of a chain-store baker, Gregg's, and a Co-op half a minute's walk down the road, there are queues every morning outside Manna House for rye loaves, bloomers, sourdough and pains au chocolat.

Curiously, when the scones emerge from the oven after 15 minutes the vegetable fat one is a clear winner on looks. It's gold and brown on top, with that classic toppled look, aching to be filled with cream and strawberry jam. Massey starts looking nervous for his butter scones, which are rather squat. But when it comes to the taste test there is no contest. The butter scone melts on the tongue. It crumbles. It's sweet and nutty. The Cookeen scone is sort of rubbery when broken and the taste is metallic, a tap- water flavour: if I hadn't watched the process I would swear it was made with different flour. The Cookeen scone has hydrogenated vegetable oil in it. The Food Standards Agency describes what hydrogenation means: "Hydrogenation is one of the processes that can be used to turn liquid oil into solid fat ... During the process of hydrogenation, trans fats may be formed. This means that foods that contain hydrogenated vegetable oil (always declared in the ingredients list) may also contain trans fats."

When Massey's father was baking in the 50s with eggs and milk, Canadian flour and butter, his colleagues were modernising. That meant using chemical bread-improvers, preservatives such as ascorbic acid, powdered eggs - "My dad hated those" - and, of course, the new hydrogenated fats. These were the result of a simple process perfected at the end of the 19th century. By attaching hydrogen atoms to oil molecules in the high-temperature process called hydrogenation you could raise the melting point of all sorts of previously useless oils - thus making them more stable and suitable for manufacturing everything from soap to axle grease.

In 1911 Procter & Gamble, then a soap and candle-maker, spotted how hydrogenation could be applied to food oils. It made a vegetable fat, Crisco, from cottonseed oil, using unwanted seeds from cotton mills. Tinned Crisco was an immediate hit in US households, cheaper than the lard it replaced and with a life of two years at room temperature before it went off. A replacement for butter followed: the oils for margarine precisely hydrogenated to remain solid at room temperature but giving the sensation of melting in the mouth.

The hydrogenated fats usefully mimicked the properties of pork and beef fats so they went into halal, kosher and vegetarian foods. By the 60s, 60% of American vegetable oils used in food were partly hydrogenated, and some research declared the trans fats actively healthy. In the baking business, the oils were crucial for the new fast-mixing and proving techniques, that needed oils that kept their solidity at widely different temperatures. The fact that these fats didn't go off, like butter or lard, gave bread and pastries a longer shelf life. They also had higher flashpoints, making them safer for frying. And best of all was that the hydrogenated oils - whether they first came from whales or palm trees, soya beans or rapeseed - were fabulously cheap.

Before, the process of baking was designed around the ingredients: now the ingredients were altered for the process. As with so many additives, once the food industry had found the cheapest method (and catering fats based on hydrogenated oil are about 12% the price of butter) it set about justifying it in other ways. Always ready with a euphemism, the industry sold HVOs as "vegetable fats" or "shortening", which certainly sounded nicer than animal fats. And it worked. British home cooks turned from lard and butter to margarine and vegetable fat.

To ascertain what an ordinary consumer might be told about this, I rang the Liverpool helpline of Princes Foods, Cookeen's manufacturers, and asked if I should be worried about the hydrogenated vegetable oil listed on the back of the wrapper. "It's been used for years and we haven't had any problems with it whatsoever," said a friendly woman on the customer-care line. "It's not a health issue."

But, I said, I had read about coronary disease. "Oh, it's just had some adverse publicity. There's been some newspapers talking about heart problems. But it's been used since the early part of this century."

Despite what the helpline said, Cookeen has announced that it will be "reformulating" in the autumn to remove trans fats.

Trans fats, or trans-fatty acids, are the more popular name for HVOs (which, confusingly, are more correctly PHVOs, partially hydrogenated vegetable oils). They have been the food scare of this summer. TF or TFAs are - a quick Google will tell you - the "killer fat", the "Franken-fat that will not die", "more deadly than saturated fats", "furring up our bodies like old kettles". Look a bit further and you can find trans fats "linked" - that dangerous health campaigner's verb - to disorders from Alzheimer's to autism. "Over the years there has been some very good research on TFAs," says Tom Sanders, professor of nutrition and dietetics at King's College, London. "And there has been some ridiculous crap written about them."

But it seems generally agreed that trans fats, like saturated fats, can raise cholesterol levels, put "plaque" on our artery walls and thus in some cases bring about heart attacks. Our bodies find the hydrogen-altered oils hard to break down - in a standard campaigner's formulation: "Would you melt Tupperware and put it on your toast?" Or as the Food Standards Agency puts it, in less loaded language: "The trans fats found in food containing hydrogenated vegetable oil are harmful and have no known nutritional benefits. They raise the type of cholesterol in the blood that increases the risk of coronary heart disease. Some evidence suggests that the effects of these trans fats may be worse than saturated fats."

Alex Richardson is senior research fellow at Oxford University's department of physiology, and director of the campaigning charity Food and Behaviour Research. She believes that Britain should follow Denmark, which has had legislation since 2003 limiting the amount of trans fats in food. "There's nothing to say in trans fats' defence," she says. "They appear to be more dangerous than saturated fats, they have no nutritional value, they are an artificial, toxic fat that we don't need. I don't see just why we can't have them out of the food supply. We have a major public-health problem here with diabetes and heart disease, and losing one contributory fat is a step towards the solution."

The novelty of trans fats in Britain, as opposed to the US, is that they are virtually invisible, lurking on most food labels only in the gap between the number given for "total fats" and the sum of poly-unsaturated, mono-unsaturated and saturated fats listed. If they are listed. Thus, unless you shop with a calculator and a magnifying glass, you are consuming unknowable quantities of trans fats in "healthy" butter substitutes, pastries, cakes, breakfast cereals, snack bars, pizzas, doughnuts, processed cream and ice cream, prepared food designed for vegetarians and, most significantly, deep-fried food.

There is more. Trans fat-laden pastries are abnormally stable - there is a campaigning nutritionist in Chicago who goes on television with a 22-year-old cupcake that still looks as fresh as the day it was baked. And - get this - the invention of the hydrogenation of oil was the trigger for the mechanised slaughter of whales during the 20th century. Whale oil, stabilised by the hydrogenation process, became the most valuable part of the animal. It provided up to 40% of margarines such as Stork and Echo whose taste spoiled so many childhood sandwiches in the 50s and 60s. And so campaigners such as Oliver Tickell, who runs the British anti-trans fat campaign, TFX, now maintain that butter may be healthier for you than trans-fatty margarine.

The food scare of the summer has also been a food campaigner's triumph. In this country, before June, many people probably hadn't heard of trans fats. But then came a rush of scary research - that adverse publicity the Cookeen lady talked of. First, via New Scientist magazine, which reported how 51 vervet monkeys fed trans fats in an experiment in North Carolina appeared to grow dangerously barrel-shaped (it is better to put fat on your bottom, the pear-shape, than around your tummy, where your heart and lungs may suffer). The monkeys, who had been on a high trans-fat diet for seven years, had fared worse than a control group fed merely on saturated fats - the traditional "bad fats". They were also showing early signs of diabetes.

At the end of July, the British Medical Journal published a review of a vast amount of disparate research, which concluded that a 2% rise in our energy intake from trans-fatty acids (say 5g of trans fats a day) "was associated with a 23% increase in the incidence of coronary heart disease". Trans fats had "no nutritional value" and adverse effects showed that even when intake was very low, at about 2-7g a day (100g of Cookeen has 2g of trans fats in it, according to the product's label, while a KFC Colonel's Regular Crispy Strips and Fries can - acccording to a New England Journal of Medicine article earlier this year - contain 4.4g a portion, derived chiefly from its frying oil. Butter contains anything from zero to 3g, but trans fats derived naturally from animals are not believed to be harmful).

In its editorial, the BMJ called on the government to legislate to reduce trans fats to less than 2% of food content (as in Denmark) and force manufacturers to quantify trans fats on labels (as has been done in the US since the beginning of this year). And at least two studies have shown that hydrogenation destroys the healthy Omega 3 oils, and that eating trans fats may block their uptake.

By the end of August, four big British supermarkets (Marks & Spencer, Tesco, Sainsbury's and the Co-op) had all issued deadlines by which they said trans-fatty acids would be gone from their own-label products. Kellogg's, United Biscuits, Nestlé and Cadbury Schweppes issued pledges to reduce or remove TFAs from theirs. The food industry was waving a big white flag: the trans-fat war seemed to have been won before it had really got going. Surprising: Big Food is normally more tenacious. But there is, of course, more to the story.

For a start, trans fats were fast becoming history anyway. This is chiefly because of the rather more advanced anti-TFs campaign in the US, which has been boosted by an unequivocal view from the medical establishment: banning trans fats could save 30,000 American lives per year, the Harvard School of Public Health announced as long ago as 1994. The US campaigners have had some stunning results: McDonald's settled a class-action suit last year with a donation of $7m (£3.7m), admitting it had failed to follow through on a 2002 promise to reduce trans fats in its cooking oil. In 2003 Kraft was successfully sued over trans fats in Oreo biscuits; KFC is now facing a similar lawsuit over its cooking oil. Since January 2006, food labels in the US have had to state trans fat quantities. And Chicago, which in August became the first US city to ban foie gras, may soon be the first to ban trans fats in restaurant cooking oil.

The growing row over trans fats led the US food industry to start researching substitutes: the availability of the new oils may explain why the British food giants are apparently acceding to the campaigners' wishes so swiftly and gracefully. A new refining process called interesterification has meant that the trans-fatty acid- bearing oils can be replaced without extra cost, while retaining what the industry calls "pleasing mouth-feel". If you really want to check this out, take a swig of Unilever's unaccountably popular Elmlea cream substitute - which stays "fresh" for eight weeks with its top off and contains an amazing 26% hydrogenated vegetable oil.

So for the British supermarkets and food processors, the expectation is that it may cost very little to get rid of trans fats and mollify the increasingly suspicious shopper. But there has been little movement from the fried-food industry, which seems wedded to its cheap deep-frying oils, whose hydrogenation means you can use them for longer without changing them (up to three months in some chippies). McDonald's uses EU-subsidised rapeseed oil for frying in Britain and it contains 16% trans fats. The company told me it is "currently evaluating even lower trans content frying media".

Oliver Tickell, of TFX, is calling for legislation to force the food-service sector to be open about trans fats. "Fast food, pub food, restaurant food, high-street bakeries and fish-and-chip shops don't have to label the presence of hydrogenated oil on their products. They haven't come under significant consumer pressure to get the hydrogenated oil out for the simple reason that people do not know it is there."

In the supermarkets, though, we will soon catch up with the US, where snack bars and pastries increasingly carry "Now with no trans fat!" banners. This has led, say some, to higher sales. "People think they mean 'no fats'," says a lobbyist from the Washington-based Centre for Science in the Public Interest, "But a 'No trans fats' sticker sits on a Nestlé Crunch ice cream bar that still contains 11g of saturated fat."

"That's the problem with labelling," says Sanders. "It's the concerned middle class that read them - not the low socio-economic groups. It's rather like putting warnings on cigarette packets. Availability is the key."

Since the late 70s, Sanders has seen partially hydrogenated vegetable oil researched and re-researched, declared safe, unsafe and very unsafe. So what does he think now? Are TFAs more dangerous than saturated fats? He is more equivocal than Richardson, but still concludes that trans fats are best avoided. "I wouldn't call either of them dangerous," he says. "That implies an acute and substantial risk to health. Cigarettes and alcohol are dangerous. I would say that trans fats may entail an increased risk: they are avoidable, so why eat them?

"Trans-fatty acids do not raise cholesterol as much as saturated fatty acids do. I think saturated fat probably causes a greater proportion of the overall risk. We've watched huge economic change in countries like Poland, seen their whole oil and fat supply change [away from animal fats], and we've seen heart disease drop."

During the post-communist 90s, the move away from a controlled economy brought a decline in subsidised dairy and animal fat production. So the Poles started eating more vegetable oils, mainly from rape seed and soy. Consumption of saturated fats dropped by 7% between 1990 and 1999, according to a paper produced by the Warsaw Cancer Centre and the Harvard School of Public Health. And their intake of polyunsaturated "good" fat rose 57% (trans fats weren't measured) - by the end of the decade, they were eating nearly four times as much fruit. By 2002, heart disease in Polish women aged 45-64 had fallen by 42%, compared with 1990, in men by 38%.

Sanders argues that much is hard to prove in this area of food and health - the obesity "epidemic", for example, does not appear to be accompanied by a rise in heart disease. It's a classic case of what he calls residual confounding, where the relationship between the chemistry and the problem may not be causal but it may be associative.

Most important of all, it's the poor who eat high levels of trans fats (the average British intake is just 1.2g a day, well within the strictest guidelines). "And people who eat a lot of deep-fried food and cheap pastries - well, their lifestyle is likely to be pretty bad as well. Cardio-vascular disease is always likely to be related to socio-economic station," Sanders says.

Richardson and Sanders agree that labelling on food products isn't working. "Trying to educate the people who eat the most fats is very difficult," Richardson says, "and all this bleating about voluntary self-regulation, letting the industry police itself just won't wash. Get real. The industry looks after its profits - the real costs of these foods are paid by the people who eat them and by the taxpayers who fund the health service. We need education, we need transparency from the food industry, and we need legislation."

Back on Easter Road in Edinburgh, I go in to Giovanni's fish and chip bar, where Jean Watson sells me a spam fritter for 90p. What was it cooked in, I ask? "Danish oil." What's that? She goes to look at the box. "Well, it's 20% vegetable oil, it says, and the rest is just ordinary oil, like." Jean has never heard of trans fats but she has had some bread rolls from the new bakery up the road. "They were lovely!"

Claire Coussmaker is a partner in the Manna House bakery and is its pastry chef. When she blind-tasted Drew's scones she had no trouble distinguishing the Cookeen one from the one made with butter. "This is a scone. This is cardboard." She held the Cookeen scone up as you might a dead mouse.

"It's like so many things you get in shops - they look great but they are just disappointing. I think that's the problem - that's why people eat so much. If the taste is not there, you just keep on eating. If it's made properly, with pure ingredients, it's satisfying from the inside out. You don't need any more."