Can wearing fur be guilt-free?

It sounds like the latest fashion oxymoron: ecological fur. A Japanese designer and furrier, Chie Imai, has called her autumn 2008 collection of fur-trimmed capes and boleros Eco Harmony. Yet the trim isn't faux-fur but chinchilla and mink. And although Imai's Royal Chie jackets command a hefty price – £6,000 for a mink bolero; £42,000 for a chinchilla cape – the rest of the garment is polyester. Less Primark and more Madison Avenue, though, this is no ordinary polyester but comes from clothes recycled in Japan. "Tying ecology with fur is such a fascinating concept," purrs Imai.

Some of us will remember the hard-hitting Lynx ad, photographed by David Bailey: "It takes up to 40 dumb animals to make a fur coat and just one to wear it". And there was the recent furore over Naomi Campbell, who fronted a People for the Ethical Treatment of Animals (Peta) campaign with the slogan, "I'd rather go naked than wear fur", yet has since donned the odd dead animal. But green fur could indeed be a grey area. As Imai says, fur can be worn for generations, is organic, causes no pollution, and "returns to the earth".

In other words, reusable, recyclable and sustainable: all eco-industry bywords. Animal-rights campaigners have quite another take on the issue. "Fur is about as far away from a green product as you can get," says Justin Kerswell, campaigns manager for Viva! (Vegetarians International Voice for Animals). The charity is launching a campaign against fur as British sales have risen by a third in the last two years, suggesting a fur comeback. According to its report, 1,000 tons of fur worth £500m are imported to the UK each year.

Imai is one of the few female furriers, and designs clothes for the Japanese royal family, as well as for celebrity royalty, such as Sarah Jessica Parker: "They want to be ecological but it's hard for them to find a way to do it." No doubt spending several hundred dollars helps. Her designs are quirky and colourful. Her fluffy pink gilet and burgundy bolero would look as if they came from Topshop were it not for the $1,000 (£560) price tag. And the fact that they're made of fox and racoon instead of viscose. "We aren't destroying anything," Imai says. "Aren't you going to eat meat? Wear belts or shoes?"

Another company in the green-fur vanguard is Eco-Luxury, an Oregon company selling "the world's most eco-friendly fur" with the slogan "All the luxury, none of the guilt". On a trip to New Zealand, Chrys Hutchings' husband gave her a fur bedspread, and the idea of using paihamu fur in the home was born.

Paihamu are possums, and they are New Zealand's biggest pest. The animals were originally brought to the country in the 1800s to establish a fur trade, and without a natural predator they bred like, well, possums. Possum-haters say that there are now 17 of these animals for every human on the island. During their nightly rampages, they chomp their way through 20,000 tons of vegetation, and are threatening indigenous plants and animals, including the endangered kiwi (the bird, that is).

"Fur is sustainable, recyclable, biodegradable," says Hutchings, who then goes on to argue that possum fur is a special case. "These animals would be killed anyhow, and the way the government does it is inhumane." Currently, the New Zealand government sprays pellets of poisonous sodium monofluoroacetate (1080) over large areas. "The animal is left out in the wild to rot, which can be a source of secondary poisoning, and there can be collateral poisoning if other animals eat the pellets," says Hutchings. Her possums are killed within 10 seconds using cyanide, or are trapped. The fur is processed without the use of artificial colours or preservatives, and made into cushions or throws that cost $200 (£112) for a cushion and $3,400 (£1,900) for a bedspread. "That the fur is ecologically compelling is icing on the cake. It feels luxurious and looks incredible," continues Hutchings, who thinks her throws can help climate change. Possum fur is the third warmest in the world, so snuggling under one of these bedspreads allows you to turn the thermostat down.

Eco-Luxury won't be branching into haute couture any time soon, though: Hutchings thinks the public is so ill-informed on fur that clients wouldn't have time to explain their fur coat's origin before having paint thrown over them. Others, such as Possum NZ, a company run by Teresa Angliss in New Zealand, have already started making hats, scarves and gilets from possum fur. An easier approach is thought to be possum wool, where the fur is woven into merino wool to create a fibre called MerinominkTM. It's being used to make jumpers by the New Zealand company Untouched World.

As one might expect, the response at Viva! is not positive. It maintains that, worldwide, 50 million animals are killed annually for their fur, and that 85 per cent of them are kept in farms. Although the fur industry says that farms are inspected and monitored, Viva! says animals are kept in cruel conditions. Arctic foxes, for instance, are housed in cages little bigger than them, when in the wild they roam across 15,000 acres of tundra. Animals are usually killed by being electrocuted with a probe in the mouth and genitals. However, undercover footage taken in Chinese fur farms, which now supply 95 per cent of the world's fur, shows racoons having their heads slammed against the ground before being bludgeoned and then skinned alive.

As well as the cruelty that Viva! says is inherent in fur production, the charity argues that fur is not as green as Chie Imai would have us believe. Pro-fur campaigners point out that faux-fur is made from fast-dwindling petrochemicals. Kerswell says: "A cocktail of chemicals is used to treat fur, and animals have to be fed and transported. There is a massive energy consumption and other waste associated with the industry. In the US, fur farms generate tens of thousands of tons of waste, including slurry, bedding and animal corpses. Farmed fur needs 20 times the energy needed to produce faux-fur."

However, Hutchings' possum fur is harder to argue against. Kerswell's response is to say: "When furriers try to justify the cruelty inherent in fur production by saying the animals they use are 'pests', they really mean that they are happy to kill wildlife for profit. They have no real interest in ecology or animal welfare. The green tag is the latest cynical ploy to hoodwink consumers."

Here in the UK, we have a population boom of feral mink, which first escaped from fur farms in the 1950s, and in some places have decimated bird and water vole populations. Turning them into fur coats, would tick many green boxes: local, fairtrade, biodegradable, reusable, sustainable – but would it be palatable?