The fashion chain confirmed that it is cancelling the planned ad campaign with Kate Moss, which would have seen her promoting clothes designed by Stella McCartney.
Moss now fears she could lose £4m worth of contracts with other brands including, Rimmel, Calvin Klein, Christian Dior and Burberry, if they decide to follow H&M's lead.
Yesterday, it emerged that the 31-year-old, multimillionaire model had signed a "good behaviour" contract with H&M, agreeing to a "healthy and wholesome" lifestyle.
At the time, it was reported that H&M said it "strongly disapproved" of Moss's actions but had agreed to let the model keep the contract.
Now the chain, which has "actively supported the drug-preventing organisation Mentor Foundation" for many years, has done a U-turn on its earlier decision.
A brief statement concluded: "After having evaluated the situation, H&M has decided that a campaign with Kate Moss is inconsistent with H&M's clear dissociation of drugs."
Moss hit the headlines last week after the Daily Mirror published grainy pictures of her in a West London recording studio with boyfriend Pete Doherty. The model was shown snorting and sharing lines of coke with a group of friends.
However, even if Moss's career does go into meltdown, she has little to worry about, financially at least, with an estimated fortune of aorund £30m at he disposal.
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