ONE of the world's largest tobacco companies is threatening to sue the British Government for billions of dollars in compensation if it makes plain cigarette packaging compulsory.

Philip Morris International, which makes the Marlboro brand, said it was prepared to "seek fair compensation" in the British courts if the plans go ahead. It claims that its branding would be damaged by the new law.

In its submission to the British Government's six-week consultation on the proposals, which ended last week, the firm said: "PMI is prepared to protect its rights in the courts and to seek fair compensation for the value of its property." It added that this could amount to "billions of pounds".

The company, which is in the process of suing the Australian government for introducing a similar law in 2012, added: "Standardised packaging is a euphemism for government-mandated destruction of property. It is unlawful, disproportionate, and at odds with the most basic requirements of the rule of law."

The UK Government decided to introduce plain packaging after a major study concluded that the move was very likely to have a positive impact on public health. Public Health England has said that the evidence in its favour is "irrefutable".

However, the introduction of the new law has been beset by delays, which critics have suggested have been caused by lobbying on the part of the tobacco industry. Ministers may now struggle to gain EU approval for plain packaging before next year's general election.

A Department of Health spokesperson said: "We want the decision on whether to introduce standardised packaging of tobacco products to be fully informed. This is why we have held a final short consultation to hear any new evidence. We will consider all responses carefully and respond in due course."