Gideon Lack peers into Jessie Martin's nostrils. 'I'm looking for my friend, the butterfly, who may have flown up your nose.' Entranced, she lifts up her head. Aged three, she is showing signs of a peanut allergy, and Lack needs to see if there are signs of other illnesses.

The paediatric allergy specialist can tell that the persistent colds that she's been suffering are, in fact, hay fever. As she is already thought to be asthmatic, it means her risk of a bad reaction to nuts is also high. Her mother only realised there was a problem on a recent holiday, when a friend gave Jessie a cashew nut. 'She started to be sick, and then spots appeared all over her face. She was gasping for breath, and it was bad, fairly scary.'

Britain is undergoing an epidemic of food allergies, and no one knows why. You can see it in the clinic in the Evelina Children's Hospital, which is part of St Thomas's in London, where patients who have waited for months, and in some cases for years, for a diagnosis finally reach one of the few specialists such as Professor Lack. This new unit opened just six months ago. Staff already have enough work for the rest of the year.

One in three of us will suffer some kind of allergy during our lifetime, but many food allergies begin in early childhood, typically between 18 to 24 months of age. They are particularly difficult to detect because often the symptoms are not specific: a bad cold, colic, tummy upset or a common skin rash. Nothing special will flag up the fact that your child has an allergy to egg, for example, but these are the signs - eczema, vomiting, irritability, tiredness.

Jessie is one of 180,000 children in Britain who have a nut allergy. The prevalence of this condition has increased threefold within 20 years, and now affects one in 70 people in the UK. The allergy can be mild or severe. Sometimes it can cause what is known as anaphylaxis, a multi-system reaction which, in rare cases, is fatal.

In 2005 there were 681 children admitted to hospital with anaphylaxis, food allergy being the most common cause. Yet even 10 years ago, this was relatively rare, and doctors believe that reactions are becoming more severe. Allergies to milk and egg also appear to be on the rise in children.

Allergies have been Lack's life's work. He is angered by how hard it is for parents to reach a specialist. 'There are about three paediatric allergists in England. I see patients who have spent many years searching to find out what is wrong. I saw a child recently who is now 12, and has spent much of his life not going outside, and not going to school. It turned out when we did the examination that he has severe hay fever for most of the year, and yet no one had diagnosed or treated it. Why?'

A report by the Royal College of Physicians three years ago was damning of the lack of allergy services in the NHS. Chair of the working party, Professor Stephen Holgate, wrote: 'The UK is way behind in its capacity to provide adequate allergy services. [It] has more than 100 allergy clinics but only six are staffed by consultants who offer a full-time service and have expertise in all types of allergic problems. Many patients are treated by their GP, who [often have] no specialist training.'

It's becoming clear that food allergies are linked to the development of other conditions, such as eczema, hay fever and asthma. Genetic factors play a role in how predisposed to allergies you are. If you have one parent with an allergy, you carry a 30 per cent risk of developing a condition, but two such parents pushes the risk to 70 per cent. The complication is that the allergy the child develops may be totally different from the parent's.

It's common to hear people describe an allergy as an intolerance, when it's not. With an intolerance, the body develops responses to a particular food, and this often happens over time, so that you may be an adult before you find yourself reacting badly to wheat, for example. With an allergy, it is an immune-system response. Even a few flakes of fish can be enough to make some people extremely ill. A genuine food allergy is far more rare than an intolerance, and also tends to be more serious.

When a baby is born, its immune system is not fully formed. The immune system is made up of white blood cells, which have a sub-group known as T-helper cells that fight off invaders. There are two forms: Th1 and Th2. An invisible battle is fought out in the child's body, probably within the first year of life, over which group will predominate.

Th1 cells enable us to combat bacterial infections such as pneumonia and antigens, or foreign bits of protein, which can harm us. Th2 cells fight off parasites, and in tropical countries are also essential for life, but for some reason, this mechanism can go wrong and the cells can react to common allergens such as pollen, and proteins in food - such as the peanut pollen. When these cells predominate, the possibility of the child becoming allergic is far higher. It is these cells that express the antibody IgE - Immunoglobulin E. They are linked not just to food allergies but a string of reactions that occur as the immune system overreacts to common substances.

Testing the scale of a child's immune response is the job of Roisin Fitzsimons, the specialist nurse who works with Lack at St Thomas's. In a small outpatients room, she starts to prepare nine-year-old Anushka for a skin-prick test. Along her forearm she draws 12 felt-tip crosses. 'These are where I am going to put the different varieties of nut allergens on to her arm, as well as two chemicals that act as controls, to test it's working properly.' She puts a dab of histamine at the top, to which everyone normally has a reaction in the form of a swelling. She then dabs on little drops of extracts made from peanut, cashew nut, sesame seed, pistachio, hazelnut, brazil nut, macadamia nut, and egg - as 50 per cent of children with nut allergies also react to egg. With amazing dexterity, she then uses a disposable needle to create a tiny nick in the skin on each cross, allowing the extract to penetrate the cells below.

Anushka winces slightly but is otherwise quite interested in the procedure. For 10 minutes we sit and chat, before Roisin looks at her arm again. There is a big swelling in reaction to the histamine, just as there should be. But there is also a substantial swelling in reaction to the peanut extract. 'Look, she's come up with a 8mm weal, so that's a positive reaction,' said Roisin. There is also a 6mm weal around the cashew nut mark.

For Anushka's parents, the knowledge of a nut allergy means that Roisin has to show them how to use an EpiPen, a device that has saved thousands of lives worldwide. It consists of a shot of adrenaline delivered by a device that plunges the needle into the thigh. It's relatively painless, and children can be trained to use it. Anushka's mother tries to imagine stabbing it into her daughter's leg. 'I suppose I would if I had to.'

So what can be done to protect a child from developing allergies? Increasingly the focus is on how diet may have an impact on your chances of developing asthma or hay fever. Philip Calder, professor of human nutrition at University of Southampton, is working on a huge study which will analyse the diets of children and adults, and compare that to the development of allergies years later. 'At the moment, there are three areas that we know have a protective influence against allergies,' he said. 'Breast-feeding, a healthy early diet, and probiotics.' But he points out that there are probably several causes that heighten allergy risk. 'Your genetics matter, so does living in a house filled with cigarette smoke. But we need to get a much better understanding of how our nutrition from the earliest years interacts with the immune system.'

But now doubt is being cast over whether our approach to feeding babies is correct. For the past decade, the emphasis has been on avoiding foods that might give your child an allergy. Health experts have warned that parents must be rigorous in ensuring their infants do not eat solids at too young an age. The guidance from the World Health Organisation has been that mothers should exclusively breastfeed for as long as possible - at least six months of life, and then slow wean with healthy food.

Many parents in Britain follow this advice zealously, and agonise over when to start weaning. Even when babies are crying after a full milk feed, and seem to be trying to put things in their mouths, are they hungry? What do you do when they wake up with what sound like hunger pangs?

Lack and his colleagues have doubts about the official advice that giving solid food to babies under six months of age might in fact increase the risks of allergies. Back in 2004, two studies were published: one showed that babies introduced to four or more solid foods in their first 17 weeks of life had a three-fold risk of developing eczema. Another study, looking at 642 children in Kent, found that introducing solid food after six months of age did nothing at all to protect the children from developing asthma, eczema or other allergic reactions.

One of the reasons for this doubt is that, in developing countries, most of which have extremely low rates of asthma and eczema, babies are exposed to different foods at a much younger age. Babies are often supervised by older children, or left to sit on the floor where they put all sorts of things in their mouths. Possibly, this early 'tasting' allows a baby's gut to be exposed to foods to which the T-helper cells can then learn to react to in the right way.

Could it be that, after years of being told that solids are a no-no for the first six months, limiting them is not the correct policy? It is the developed, western nations - Britain, America, New Zealand and Australia - that have the soaring allergy epidemics. In Israel, where young children are given peanut foods before the age of one, there are very low rates of nut allergy. What if we should actually be giving certain foods to toddlers at an early stage, in order to protect them from allergies?

'There is this assumption that avoidance is the best policy,' says Lack. 'Once you are allergic to a particular allergen such as cat hair, you should avoid it - but that's not the same as saying that babies shouldn't be exposed to cat hair because they might become allergic to it as a result of early exposure. This dilemma of avoidance versus exposure is absolutely central to understanding allergies. It's not just food - it's what you do with everything - cats, dogs, house-dust mites, eggs, nuts. There is huge controversy within the field.'

Some new foods that have recently come into our diets now cause problems. Kiwi fruit cause nasty rashes and symptoms for some people. The same with soya. One possibility is that young children are coming into contact with foods through the skin. Peanut oil, for example, is used in a number of creams, and allergists have speculated that absorbing these nutrients topically sets up the immune system to respond in the worst possible way. The other question is whether children need to receive a certain amount of a food regularly in order to help their digestive system respond in the right way. But no one has any idea of what 'a correct dose' of cow's milk or wheat or eggs might be. However, Lack is very clear that no one should interpret his words as suggesting that they should start giving their babies peanut foods. 'We just don't know at the moment, and we really do need to know.'

Up on Savannah ward in the hospital doctors have embarked on a major study that they hope will yield answers as to why certain children become allergic to foods, while others do not. Known as the Leap (Learning Early About Peanut allergies) study, some 480 children who are known to be at high risk of developing allergies are being recruited, so that they can be monitored for five years.

Each child will be randomly assigned to follow one of the two approaches - avoidance or consumption. Children in the avoidance group will avoid peanut-containing foods until they are three. In the consumption group, parents are asked to feed their child a peanut snack three times a week (about six grams of peanut protein per week).

The thinking is that, by giving them a significant dose, it may prime the body to respond in the right way, rather than encouraging the immune system to react as if it were a hostile foreign body, and provoke a dangerous allergic response.

'We just don't know what we are going to find,' says Lack. 'But you can only do this research in a controlled environment where we can help a child if they do have a reaction.' And the information may not just apply to peanuts. If a child can be protected from allergies by eating the very thing that we currently see as a risk it may also be the case that having the right amount of other foods at a young age could confer protection on the immune system.

It is not only peanuts which can provoke a life-threatening reaction. For Katherine Newnham, every day carries a risk for her two boys, Jamie, five, and three-year-old Matthew. Both suffer from milk and egg allergies, with Jamie particularly at risk.

Katherine, a chartered accountant, recalls clearly the first time she realised something was wrong. 'Jamie had terrible eczema as a baby, and really bad colic, but for some reason we never associated it with a particular food. Then one day, when he was around 12 months, I gave him a spoonful of his dad's scrambled eggs.

'His face swelled up, his skin became covered in this huge rash and he went into a kind of listless state. After that he fell asleep for four hours.'

For Katherine and her husband Michael, it was a lucky escape. Jamie's breathing could have stopped during such a reaction. This is now their great fear, as their older son develops breathing difficulties when he comes into contact with egg.

She has helped both the local school and the local nursery in Wimbledon, south London, learn about anaphylactic shock. She provided both with videos showing teachers show to use an EpiPen, and now works with the cooks to show them alternatives to egg-based recipes. The nursery Matthew attends, for example, no longer serves egg pasta.

'I've taught my friends what to do in an emergency. And now our local pizza place uses a different pizza cutter for my boys' meals, so that it won't have come into any contact with cheese or egg.

'We're now entering a new phase, when I'll leave Jamie at birthday parties by himself. The other day I dropped him off at a friend's, went five minutes down the road and sat in the car, just wondering how he would be. The fear of a bad reaction never leaves you, but all I can do is educate my boys how to look after themselves and be aware of the dangers. It's a world away from my childhood.'

· Allergy Explosion by Jo Revill (Kyle Cathie) is available for £8.99 from observer.co.uk/bookshop. LEAP study, 0800 234 6522, www.leapstudy.co.uk; Guy's and St Thomas' Paediatric Allergy service, 020 7188 3300, www.childrensallergy.org; Anaphylaxis Campaign, 01252 542029, www.anaphylaxis.org.uk