Mandelson blamed for stubbing out new anti-smoking laws

It follows private talks yesterday between the Business Secretary's aides and the anti-tobacco campaign group Action on Smoking and Health, the Evening Standard has learned.

At stake are two proposals to discourage cigarette sales, which retailers say would be damaging to small shops.

One is to ban big displays of cigarettes, forcing smoking materials to be kept under the counter. The other is to ban tobacco vending machines.

Both have reached advance stages of Whitehall planning, including formal consultations, and had passed through various committees.

Until yesterday, Ash campaigners were convinced they had strong support for the measures being included in an NHS Bill in next week's Queen's Speech.

Ash believed it had backing at the Department of Health and that the department for Business, Enterprise and Regulatory Reform was not standing in the way.

However, since Lord Mandelson's recall to the Cabinet, they say the "atmospherics have changed". One of the peer's first recruits to BERR was former No10 policy aide Geoffrey Norris, a passionate deregulator, who met Ash for talks.

Ash director Deborah Arnott said: "The proposed legislation has attracted huge public support. Now, however, it appears that BERR is trying to block it. It is as if Peter Mandelson is putting a block on health policy."

Ash says retailers have warned Lord Mandelson's officials that they would suffer if the measures go through.

An official close to the peer denied he had blocked the measures. He said the Cabinet minister had not yet become involved in the proposals.