On Barbara Young's office table is a graph. A bar chart, actually: four columns of green, purple, red and bright blue showing the progression, in England, of rates of coronary heart disease, stroke, cancer and diabetes over the past five years. The first two are flatlining or falling. Cancer, in red, is rising, but slowly. Trace a line between the blue bars from 2005 to 2010, and it soars off the chart.

"Diabetes," says Young flatly, "is becoming a crisis. The crisis. It's big, it's scary, it's growing and it's very, very expensive. It's clearly an epidemic, and it could bring the health service to its knees. Something really does need to happen."

Baroness Young is, admittedly, the chief executive of Diabetes UK, Britain's main diabetes charity and campaigning group. It's her job to say such things. But the figures are behind her all the way: diabetes is fast becoming the 21st century's major public-health concern. The condition is now nearly four times as common as all forms of cancer combined, and causes more deaths than breast and prostate cancer combined. Some 2.8m people in the UK have been diagnosed with it; an estimated 850,000 more probably have type 2 diabetes but don't yet know. Another 7m are classified as high-risk of developing type 2; between 40% and 50% of them will go on to develop it. By the year 2025, more than 5m people in this country will have diabetes.

The implications for the NHS, obviously, don't bear thinking about. Diabetes already costs the service around £1m an hour, roughly 10% of its entire budget. That's not just because the condition generally has to be managed with medication or insulin, but because by the time they are diagnosed, around half the people with type 2 – by far the most common and fastest growing form – have developed a longer-term complication.

Cardiovascular disease, for example, will kill 52% of people with type 2 diabetes, who are also twice as likely to have a stroke in the first five years after diagnosis as the population at large. Almost one in three people with the condition will develop kidney disease, and diabetes is the single biggest cause of end-stage kidney failure. You are up to 20 times more likely to go blind if you have diabetes.

"The cost of some of these complications, in terms of medical and social care, unemployment benefits, everything, is just enormous," says Young. "People can't work, can't drive ... And so many personal tragedies. People with diabetes have a foot amputated 70 times a week in England, and 80% of those amputations wouldn't have been necessary if it had been caught earlier and looked after properly."

Recently, Young says, she met a former ballerina. "No one had told her, when she was in her 20s and 30s, that maybe it wasn't such a good idea, might be dangerous even, to keep her blood sugar level deliberately high, for energy. She just had her heel amputated."

Nor is this, of course, a national epidemic. Around the world, some 285m people now have diabetes, a figure expected to climb to 440m within 20 years. In north America, one in five men over 50 have the condition; in India, it's 19% of the population; in parts of the Middle East, 25%. On the tiny Pacific island of Nauru, very nearly one in three people has diabetes. This goes some way to explain why some countries are taking a tough stance on health – Denmark has imposed a "fat tax" of 16 kroner (£1.84) per kilogram (2.2lbs) on saturated fat in a product, while France is adding just over 1p to the price of fizzy drinks (although zero-calorie "diet" versions are exempt).

So what is it? Diabetes is when there's too much glucose in the blood. Glucose is the body's fuel; our cells use it as their primary source of energy. But to enter a cell, glucose needs insulin, a hormone made by the pancreas. If for some reason we don't produce enough insulin, or the insulin we produce doesn't work properly, glucose builds up in the blood. That's diabetes.

There are two main types: type 1, which accounts for around 10% of all diabetes, is when your body produces no insulin. Nobody quite knows what causes this, but it's not preventable and it typically presents itself early on, often in childhood.

Type 2 is when your body can make insulin, but not enough of it, or when what it makes doesn't work properly. For reasons not fully understood, type 2 diabetes is six times more common in people of South Asian descent, and three times in people of African and African-Caribbean origin. It usually occurs from around the age of 40 (or 25 if you're South Asian or black), and apart from genetics – you have a 75% chance of developing diabetes if both your parents did – the biggest preventable risk factor is weight.

This is about unhealthy diet, and lack of exercise. "It's just so easy to eat nowadays," says Young. "We live in what I call a glucotoxic environment. And we simply don't get the physical exercise we used to."

Naveed Sattar, professor of metabolic medicine at the University of Glasgow, is one of the UK's leading diabetes researchers. (He's also very lean, and alarmingly fit. Of South Asian descent, both his parents have type 2 diabetes: "My lifetime risk," he says, sitting in the lobby of the British Heart Foundation's headquarters in London, "is around 95%. I am very careful.")

Sattar is unequivocal about the reasons for the epidemic. "There's genetic potential, plainly," he says. "Family history, and ethnicity. But what I tell my patients is basically this: weight gain, excessive weight gain, will eventually lead to type 2 diabetes. This is an obesity-driven epidemic. Make no mistake."

Not just obesity either; overweight can be enough. But how does that excess weight lead to type 2? Scientific understanding of how this works is relatively new, Sattar says, but the thinking is roughly as follows: if we consume more calories than we burn, we store the excess as fat. Among the places we store it are the pancreas and the liver, thus interfering with the former's capacity to produce insulin, and the latter's capacity to react to it.

Researchers at the University of Newcastle recently established that type 2 could, in some cases, be "cured", at least temporarily, by an extreme 600-calorie-a-day diet – the effect was to reduce body weight dramatically, but also to slash fat on the liver and pancreas.

Similarly, some 73% of people with diabetes who have undergone bariatric surgery, and lost at least 15kg of body weight as a result, appear to be free of the condition. "It's looking increasingly likely that this accumulation of excess fat on the liver, and now the pancreas, is a key cause of type 2," says Sattar.

Statistically, the risk of diabetes soars as the pounds pile on: an increase in body mass index (BMI) – the generally accepted measure of healthy weight for height – from 21 (healthy) to 35 (obese) means you are 50 to 80 times more likely to develop type 2.

But the correlation isn't perfect. Some people with a supposedly healthy BMI develop the condition; others with BMIs into the 40s do not. It appears that women have to put on more weight than men to develop the condition. People of South Asian origin can develop diabetes with quite low BMIs; Sattar's two uncles did so in their 30s, with BMIs of just 24.

"We're thinking it's about an individual's ability to make and store fat safely," he says. "Some people can store fat subcutaneously. With others, it goes straight to the liver and pancreas. That's the classic big waist, pot belly shape; the fat isn't distributed around the body." This explains why simple waist measurement – 37in or more for men, 35in for South Asian men, 31.5in for women – is now seen as a better risk indicator for diabetes than BMI.

Once diagnosed (the symptoms, classically, include urinating more than usual, increased thirst, tiredness and blurred vision), diabetes has to be managed. For some, this can simply be about diet and exercise. Many more require a panoply of drugs that act variously to reduce sugar levels; prompt the pancreas to produce more insulin; get the insulin to work better. When drugs can't regulate sugar levels, the final treatment line is insulin.

But our success in managing the condition, Sattar says, is creating new problems: "We're getting pretty good at keeping people alive longer," he says. "And we're seeing more and more obese younger people going onto tablets ever earlier. That means the population living with diabetes is rising. Statistically, the number of complications could well increase."

Young warns that that's the last thing the NHS needs. "This isn't actually a money thing," she says. "It's not like care for the elderly. There is money in the system. But we need to switch resources: spend money much earlier on prevention, risk assessment, early diagnosis, help with effective self-management."

Young wants a major government healthy-lifestyle push – coordinated measures including a national information campaign, local support, tax incentives – that would contribute to raising the profile of diabetes as "an important and ghastly condition", plus a proper risk-assessment programme. She's not confident of getting the former, because this government doesn't much like big, centralised, top-down initiatives. On the latter, she says, the NHS has something called a Vascular Health Check, which people over 40 should be getting, "except most of us haven't heard of it. We screen for cervical cancer, heart disease, high blood pressure. The stroke programme's completely revamped. But diabetes is now a much bigger problem than stroke. A vascular check would help pick it up, and it's not working."

Diabetes UK has drawn up a 15-point list to help ensure everyone diagnosed with diabetes gets the care they need, including checks on blood sugar levels, blood pressure, cholesterol, eyes, feet and kidneys. "We want 2.8m people up on their hind legs, demanding they get the right care," says Young. "That has to change. Plus there are big variations in care regionally."

Type 2 is, additionally, a class condition: the most deprived people in the UK are two-and-a-half times more likely to have the condition than the average. Sattar reckons a big part of the future effort is going to have to be in "simple, pragmatic, sustainable" dietary advice. "We have to get better at advising people on what they eat," he says. "Changing someone's eating habits is very, very hard. One of my patients from the east end of Glasgow, who's never eaten an apple in his life ... It's going to be hard. But that's the way we're going to have to go."

Living with diabetes

Kash Kahn 33

Kahn was at Wolverhampton university, playing squash, going to the gym six times a week, doing kung fu four times a week, when he was diagnosed with diabetes eight years ago. "I wasn't eating well," he says. "It was grab and go. In lectures in the afternoons, I'd started to feel tired. And I was passing a lot of water, feeling thirsty at night."

When he finally tested his blood sugar level, it read 28; the target level, before meals, is between 4 and 7. "It was a bombshell," he says, "and very hard to deal with. I had no idea about this whole South Asian susceptibility to diabetes. The doctor put me on tablets, which didn't really work. Then insulin, which I was very bad at because my lifestyle was just too hectic. Then another drug, which gave me terrible stomach cramps."

For several months, nearly a year, Kahn says, he simply stopped all treatment. "I thought I was invincible, doing all this sport. But I had just qualified as a sports therapist, and I had some nasty calluses that weren't healing – another classic diabetes symptom. A really good friend insisted on taking me to hospital. And after that, I got sorted out."

Now Kahn is on a combination of drugs that works for him. "Things have stabilised. I eat and drink sensibly, no lager or cider, no carbs at night. I keep very fit. But for me it was really a psychological battle as much as a physical one. This is going to be with me for the rest of my life."

Carole Shapiro, 65, and Stephen Schisler, 69

Sister and brother Carole and Stephen were diagnosed with type 2 diabetes three years apart, both at the age of 47. "It was a big shock when I was first diagnosed" during a Well Woman check, says Carole, whose husband has also since been diagnosed with the condition.

"I certainly wasn't obese. I could do with losing a stone, like many people, but I wasn't obese. And I had no symptoms – I wasn't tired, or thirsty, nothing like that. It was upsetting, of course. I knew very little about it and I was very worried about how it would affect my life. In fact, you get on with it. We eat sensibly, avoid sugary stuff, exercise two or three times a week, and inject twice a day."

Carole has had only one nasty incident: tired, anxious, out of her normal routine one day, she "went into a hypo" – the common term for hypoglycaemia, when blood glucose levels fall dangerously low. "I had to go into hospital, in the middle of the night," she says. "But it was just the once. I look after myself."

Neither Carole nor Stephen, who discovered he had diabetes through a urine test for a kidney infection, feel the condition has unduly spoiled their lives. "I'm trotting along, still working three days a week," says Stephen, who had a heart attack 10 years ago and now wears a pacemaker. "I do what I'm told; I keep pretty active. I keep away from sweets and white bread. Injecting was very tough to start with; I had a real phobia of needles. But you get over it."

Both blame the fast-growing prevalence of type 2 on poor eating and exercise habits: "People eat such rubbish," says Carole. "It's scary." But Stephen would like to see universal, regular blood testing. "It's cheap, it picks up the problem early, it could have a huge impact," he says. "It's crazy the NHS doesn't do it." They have since learned both their father and grandfather had type 2 diabetes.

Peter Clitheroe 38

"I discovered alcohol at 17 and made up for lost time through my student years," says Clitheroe. "I'm 6ft 2in and by the time I'd left uni in 1997 I was affectionately known as Big Pete – I weighed 23st 10lbs. I tried to lose weight, tried everything, and nothing worked. The only thing I didn't try was sorting my head out."

For several years Clitheroe's weight fluctuated wildly; 18st when he got married in 2003, back up to 23st by the time his son was born four years later. "There's a photo of my son, me, my dad, his dad on top of grandad's telly," he says. "I'd see it every time I went round. I've actually got my arms by my sides, but it looks like I'm trying to fly, they're that big."

In November 2008 he went to the doctor with eye problems; a blood sugar test showed 14.7. With the encouragement of his father-in-law, a former GP, Clitheroe joined WeightWatchers, stuck at it for a year, and wound up at 15st 2lb. "I'm in control now," he says. His collar size has shrunk from 18in to 15in; his waist from 44in to 36in. He cycles 16 miles to work and back four days a week; Last year he did the Manchester 10km run, raising £700 for diabetes research.

"My blood sugar is down at 6.2, and my cholesterol has fallen from 7.8 to 3.4," he says. "In fact, if I hadn't already been diagnosed I wouldn't actually have diabetes now." He now aims to come off his tablets – he takes three kinds a day – for a month "and see what happens. If the levels go back up, I'll be back on the medication. But you never know."

Perversely, Peter says, being diagnosed was "about the best thing that could have happened to me. It got me back on track; gave me a second chance."

He still loves his food: "I'd love to go to some TV chef and say: 'Make something that really tastes good, but is genuinely low-fat.' And how come the low-fat dishes in the supermarket are always more expensive than the others? But it's your head you have to get sorted out."