IRELAND has become the first country in Europe to pass laws banning branded cigarette packets.

Following the example set by Australia, all tobacco products sold in Ireland will be in a standard dark-coloured wrapper emblazoned with large health warnings and images of disease.

Slim boxes of cigarettes, in lipstick-style shapes, will also be illegal under the reform.

Brand names will be small and use similar fonts on all packets in the marketing clampdown which is likely to be challenged in the courts, either in Ireland or under European rules.

James Reilly, Children's Minister and a former health minister who spearheaded the ban, said it was about protecting people and should be seen as a good day for the health of children.

"The interests of public health will be served when children decide never to take up smoking in the first place and if smokers are persuaded to quit," he said.

"We have a duty to prevent our children from being lured into a killer addiction.

"Standardised packaging will strip away the illusions created by shiny, colourful cigarette packets and replace them with shocking images showing the real consequences of smoking."

The UK is set to follow the Irish example with laws to be passed before the end of the month.

Anti-smoking campaigners and Government say the ban will remove one of the last remaining and most powerful marketing tools of big tobacco firms, but it is facing a legal challenge over claims it infringes trademarks and the free movement of goods across the EU.

Up to 10 European countries are understood to have complained over Ireland's branding ban.

Analysis done for investors by Exane BNP Paribas has warned that the tobacco industry could be in line for payouts in the billions if the same law is passed in the UK.

In Ireland, with about 800,000 people estimated to smoke - a prevalence rate of about 22% - a successful compensation claim is likely to run to hundreds of millions, the investor advisers said.

New Zealand is also progressing similar laws while France, Finland and Norway have indicated they will go down the same path.

Anti-smoking group Ash Ireland said the ban was vital health legislation.

Spokesman Ross Morgan said the Government and opposition politicians should be complimented for pushing ahead with the ban despite threats of lawsuits.

"We would also expect that should the industry mount a legal challenge on any aspect of this health legislation it will be vigorously contested," he said.

"Ash Ireland is firmly of the view that the successful implementation of this legislation here in Ireland will set the scene for others to follow in Europe as was the case with the workplace smoking legislation some 11 years ago."

More than 5,200 people die in Ireland each year from the effects of smoking and more than 1 billion euro (£730m) is spent by health services every year treating tobacco-related disease.

The country's Revenue department said it took in 984 milion euro (£716m) in excise duty and an estimated 309 million euro (£225m) from VAT from tobacco sold over the counter in Ireland last year - a total of 1.3 billion euro (£950m).

Dr Morgan claimed the early indications from Australia are that smoking rates have fallen and young people find the standardised packets less attractive.

"In recent weeks it emerged that some legal companies were advising the tobacco industry and various elements of our health services," the doctor said.

"This is an apparent conflict of interest which must be examined further and it seems clear that the status quo in this area is entirely unsatisfactory."

The Department of Health in Dublin said: "The threat of legal challenges should not act as deterrents for the introduction of appropriate public health measures."

It added: "The state would argue that the Irish Government has approved the development and introduction of this legislation on the basis that it is a proportionate and justified public health measure."

Ireland introduced a workplace smoking ban 11 years ago this month making it illegal to smoke in bars and restaurants.

It was the first country in the world to impose such an outright ban and followed that with restrictions on displays of cigarettes and tobacco products in shops, restrictions on vending machines and an end to the sale of packets of 10 cigarettes.

Efforts are also being pursued by campaigners to make it illegal to smoke in a car with children.

President Michael D Higgins will formally sign the legislation into law at a date to be confirmed.

PA Media