Here's an interesting new article that I just found on the web:

http://news.yahoo.com/s/afp/20090625/wl_uk_afp/britainjapanhistorywwii

To the best of my knowledge, Britain never considered using gas against Germany, most likely because the UK was close enough to the Continent for retaliation to take place. I wonder if the reason why the use of chemical weapons against Japan was seriously considered was because there was no chance of retaliation. I also wonder if racial prejudice against Japan measured into the equation to consider using gas.

I wonder if this was just one of those lets-draw-up-a-plan-just-in-case-scenarios that military planners are wont to make. It could have been driven by frustration with the fact Japan was obviously beaten but showed no signs of surrendering. If the allies were ever going to use chemical weapons against Japan Iwo Jima would have been the place. - Ronan

Update - according to newly-released British archives Churchill also planned to use poison darts on the Germans.
See here
http://www.timesonline.co.uk/tol/news/uk/article6578583.ece