Clubbers who use the drug "mexxy" should face up to five years in jail, Government advisers have said.
Methoxetamine, which is sold as an alternative to ketamine, has been linked to two deaths in Leicestershire.
It is believed the two people – a 59-year-old woman and a man aged 32 – whose bodies were found in Melton and Leicester, on February 11 and 12, had taken the drug.
Their deaths, which were reported in the Mercury, are to be examined at a coroner's inquest.
Yesterday, the Advisory Council on the Misuse of Drugs said methoxetamine should be made a class B drug
The substance, the first to be placed under a temporary class drug order, was banned in March while the advisers considered whether it should be permanently controlled.
Council chairman Professor Les Iversen said: "Methoxetamine is not a 'safe' alternative to ketamine, as it is sometimes advertised.
"It is a dangerous and harmful drug which can cause heart problems, hallucinations and paranoia.
"The evidence leads us to advise that methoxetamine should be permanently controlled under the Misuse of Drugs Act."
Users face heavy fines and up to five years in prison, while suppliers could be jailed for up to 14 years, if it is made a class B drug.