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'Wow, Marks & Spencer, I'm really proud of them," says Woody Harrelson, the Oscar-nominated actor, ethical activist, vegan, raw foodist, yoga devotee and party animal, in his low Ohio drawl.

"I am amazed by these percentages. Seventy-eight per cent of people say they would like to know more about the way clothes are made, including the conditions in the factory, where they come from and the use of chemicals in their manufacture. Seventy-eight per cent! Fifty-nine per cent avoid buying food they think is not up to scratch. These are major percentages," he says between mouthfuls of crunchy roughage from Fresh & Wild, the organic food shop.

Harrelson, who is starring in the West End production of Night of the Iguana, is reading from an M&S press release about its new "Look behind the label" campaign to inform customers about how its products are sourced and made. It also includes details of a new, 60,000-item range of Fairtrade cotton clothing that M&S will launch next month.

"This is the first major retailer I've ever known do this. This is great news," Harrelson says.

Ethical clothing is very much Harrelson's home ground. The actor, who wears hemp or bamboo grass clothing most days ("I haven't always been the most stylish fella but certainly I've felt clean on a moral level"), could fairly be described as both a celebrity and an eco-warrior.

But his steely glare - used to such great effect in Natural Born Killers, the blockbuster film - breaks into a grin when he hears about what M&S is doing. Next he hopes that M&S will move into organic cotton, which requires no pesticides (the majority of Fairtrade cotton is not organic).

And spring-summer 2006 is certainly the season that will see ethical clothing moving from the underground into the mainstream. Topshop, the retail chain that is part of billionaire Philip Green's Arcadia empire, is launching a raft of organic cotton babywear ranges in April. The retailer even has a buying executive dedicated to sourcing ethical clothing.

Others are at it too. Last month Bono, the U2 singer, launched Red, a fashion label that will sell ethically sourced products and give a slug of its revenues to fight Aids in Africa.

Gap, Giorgio Armani and Converse are among the large companies signed up. Bono's wife, Ali Hewson, also designs a separate ethical clothing line. The list goes on.

Green is fast becoming the new black. The market for ethical clothes rose by 30 per cent to £43m during 2004, according to the Co-operative Bank's Ethical Consumerism Report 2005. Boycotts of companies because of consumers' concerns about sweatshop labour or animal welfare rose by 8 per cent.

But can mainstream chains make money from ethically sourced and manufactured clothing, or are they just jumping on a conscience-cleansing bandwagon that is populated by celebrities and eco-warriors?

According to Harrelson, the retailers' move into ethical clothing is more than a marketing ruse. He believes the public is more concerned about what is going on behind the scenes than it ever was, and this goes for what they wear, eat and are told by people in power.

"This is part of a bigger picture. Fahrenheit 9/11 [the film about America's war on terror] was the real proof that people are concerned with progressive ideas. It was the most watched documentary of all time," he says.

Safia Minney, the founder of People Tree, one of the ethical clothing manufacturers that will supply Topshop, says retailers are responding to a new consciousness among consumers. She believes shoppers have "had enough" of not knowing where their clothes come from, and says 50 per cent of people reassess a purchase if they doubt a garment's provenance.

She thinks there is a backlash against store groups' recent move into so-called fast fashion - in which cheap clothes are sourced at short notice from factories close to the UK. Retailers are starting to rework their supply chains to respond to these criticisms., she says.

But do the economics stack up? Ethically sourced clothes cost more to produce than conventionally sourced garments. This is because of the extra work, special processes and checks that go into manufacturing the products.

But retailers pass this extra cost on to the consumer. A Fairtrade T-shirt from M&S's range, for example, will cost £7, £1 more than an equivalent normal T-shirt. Given that customers appear happy to spend more to buy such clothes, the extra cost is not really an issue.

There is little profit advantage either. M&S sells its Fairtrade clothing at the same margin as its other fashion lines. Indeed, it has made a policy commitment not to take additional margin from its Fairtrade clothes.

In other words, the economics of selling ethically sourced clothing are the same for M&S as selling normal clothes - it just charges more because the products cost more to make.

So far, so inconclusive. Where the economic argument for big retailers selling ethical clothing begins to falter is in the labour-intensive manufacturing process and the re-engineering of the supply chain that such a move requires. The whole process remains hugely inefficient.

For example, for the Fairtrade cotton that M&S sources from its farmers to be spun, huge cotton mills have to stop their production runs of conventional thread and be cleared for the Fairtrade batch. Economies of scale are lost.

There is also an issue with volumes. M&S uses 50,000 tons of cotton a year in all its products, yet the total volume of Fairtrade cotton produced globally is between 600 and 1,000 tons. This again limits production.

People Tree's Minney says it takes a lot of time, money and work to establish a truly ethical supply chain. It took People Tree's Japanese arm eight years to reach profitability, against five years for the UK business. Such delays are unlikely to be tolerated by big retailers' shareholders.

Nevertheless, baby steps are being made in the right direction, says Stuart Rose, M&S's chief executive. He admits that M&S's ranges will be limited because of supply limitations, but is hopeful that ethical clothing will grow as part of the business. "All the signs are that this is something we will want to build on," he says.

Harrelson points out that when organic food was launched in the UK it was dismissed as a fad. It now accounts for 3 per cent of the market. He says there is a clear business case for mass market retailers to move into ethical clothing and that they simply wouldn't do it if it did not make financial sense.

"The reason M&S is doing this is because of the bottom line, because customers are interested in that kind of thing. These guys are at least on the pulse."