Cognitive therapy can cure 90 per cent of panic attacks, the British Association also heard.
The therapy is much more successful than drug therapy, which works in 50 per cent of cases and has a far higher relapse rate when treatment has finished.
David Clark, Wellcome principal research fellow at Oxford University, described a series of delicate experiments that have led to a model of panic attacks.
He and other groups have shown that sufferers are much better at monitoring bodily symptoms, such as their heartbeats, which most of us miss.
They also misinterpret symptoms - for example a palpitation may lead them to expect imminent death from a heart attack.
Panic attacks can be induced in sufferers in the laboratory simply by presenting them with pairs of words, such as "breathless . . . suffocate", where the second word implies the worst interpretation of the first. Sufferers never seem to learn from the fact that they survived the panic attack.
The resulting theory is that a panic attack is a vicious circle. Sufferers pay selective attention to a certain bodily cue that may have been induced by running upstairs or by a fleeting memory. A palpitation, for example, may cause a fear of death which sets up panic which causes more palpitations.
The therapy encourages patients to change the way they interpret their symptoms.
Dr Clark gets patients to test out the new interpretations. So, he might encourage a patient who perpetually thinks he or she is going to have a heart attack to run hard on the spot for five minutes rather than sit down.
Dr Clark has found that 90 per cent of sufferers are free from panic attacks after 12 weeks of therapy.
After a year only 5 per cent of patients have relapsed, compared with a 40 per cent relapse rate on the most common drug therapy.
He said that his methods could also predict whether a sufferer taking drug treatment would relapse.
More than a third of the population will have a panic attack at some point in their lives. One in seven of those go on to have repeated attacks.