A US writer has uncovered evidence suggesting the CIA spiked a French village's food with the hallucinogenic drug LSD.

The Sun online reports journalist H P Albarelli Jr came across CIA documents while investigating the suspicious suicide of a biochemist who fell from a 13th floor window two years after a mystery illness that caused an entire French village to go temporarily mad 50 years ago.

Hundreds of residents in picturesque Pont-Saint-Esprit were suddenly struck down with mass insanity and hallucinations on August 16, 1951.

At least five people in the southern French village died and dozens were locked up in asylums after witnessing terrifying hallucinations of dragons and fire.

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In the horror scenes an 11-year-old tried to strangle his grandmother. Another man shouted: "I am a plane", before jumping out of a second-floor window, breaking his legs.

For decades the bizarre "Cursed Bread" incident was blamed on a local baker whose baguettes had been poisoned with either a psychedelic mould or mercury.

But new evidence points the finger at the CIA who are accused of spiking bread with LSD in a mind control experiment.

The incident - which took place at the height of the Cold War - was investigated by a Swiss pharmaceutical company Sandoz. The company has been revealed as the same organisation that secretly supplied the CIA with LSD.

One note transcribes a conversation between a CIA agent and a Sandoz official who mentions the "secret of Pont-Saint-Esprit" and explains that it was not "at all" caused by mould but by diethylamide - the D in LSD.

The French Government has officially denied any involvement in the case. According to US reports, French intelligence chief have demanded the CIA explain itself. The CIA is yet to come forward.