Britain launched an independent review on tobacco packaging on Thursday and said it was ready to introduce new laws banning branding on cigarette packets if the report found sufficient evidence to support it.
The government, which in July delayed a decision on the issue, said the review was due to report back in March 2014 and would look into whether standardized packaging is likely to have an effect on public health, and particularly in relation to children.
The long-standing debate on the issue pits health campaigners, who back the move, against big tobacco firms which say it would put jobs at risk and encourage smuggling. In Britain, the subject has also prompted criticism from the opposition Labour party over the extent to which the tobacco industry is able to influence government policy.
The news hit stocks of British tobacco firms. British American Tobacco shares were down 0.9 percent at 3243.5 pence at 10 09 GMT, while smaller rival Imperial Tobacco Group's shares were down 2.5 percent at 2304 pence.
After a lengthy public consultation, Prime Minister David Cameron in July delayed a move to force manufacturers to sell tobacco in plain packets, saying he wanted to see more evidence from other countries on the effectiveness of such a move.
Almost exactly a year ago, Australia passed a law saying cigarettes must be sold in dark brown packets with no colors or logos, with the name of the product printed in a standardized small font.