LONDON (Reuters) - Drug addicts who refuse to accept treatment will lose their state benefits for up to six months, under new measures announced on Wednesday.

The plans, part of the Home Office's wider drugs strategy, have been denounced by critics, who labelled them flimsy and unlikely to achieve any real change.

Unveiling the 10 year-strategy, "Drugs: protecting families and communities", on Wednesday, Home Secretary Jacqui Smith said almost one billion pounds would be invested to help tackle drug-related crime and social problems.

Along with threatening cuts to benefits payments, other proposals include:

* New laws to allow seizure of drug dealers' assets on arrest rather than conviction.

* Encouraging grandparents to help care for children of drug-addicted parents.

* More and better drug education for primary students.

* A crackdown on international drug trafficking and money laundering.

"We do not think it is right for the taxpayer to help sustain drug habits when individuals could be getting treatment to overcome barriers to employment," the strategy document said.

"In return for benefit payments, claimants will have a responsibility to move successfully through treatment and into employment."

Critics noted the plans only "encourage" drug users to seek treatment.

Latest figures show illegal use of class A drugs alone costs taxpayers more than 15 billion pounds annually.

The government claims drug use has fallen to an 11-year low and that drug-related crime is down by a fifth, but opposition parties claim crime has increased by almost half.

"Labour's failure to tackle drugs has led to an increase in drug crime by 43 percent... and left us with the worst problem of drug use in Europe," shadow Home Secretary David Davis said in a statement.

Drug campaigners said the plans could create further problems and higher bills to the taxpayer through increased health and crime costs. If benefits are withdrawn, they say, addicts will simply steal to maintain their supply.

Police have welcomed the plans.