Shares in Gallaher fell 19p to 335p and Imperial Tobacco's stock gave up 10.5p to 401.5p amid fears that the documents would increase the chance of successful litigation against the two tobacco giants.
Anti-smoking campaigners claimed an internal confidential memo from Gallaher's former general manager of research to its managing director proved the group knew smoking caused cancer as far back as 1970. The research executive concluded that independent research using beagles in the late 1960s "proves beyond all reasonable doubt the causation of lung cancer by smoke" and that the research "would appear to remove the controversy regarding the causation of the majority of human lung cancer."
Leigh Day, the solicitors representing 52 lung cancer victims in their bid for compensation from Gallaher and Imperial, said yesterday the new evidence significantly raised the chances of mounting a successful legal claim against the industry. "The tobacco companies have always maintained that there is no proven link between smoking and cancer. This blows their defence out of the window," said a spokeswoman for the firm. "This is only one of many documents that will surface over the next few months that will strengthen our case," she added.
Gallaher hit back at the claims, saying the memo had simply been an initial reaction to the research and that it was later discounted by the company after being heavily criticised in the scientific community.
A Gallaher spokesman said: "Our position is that the link between smoking and cancer has not been proved, although we agree that smoking is a risk factor and that statistics show that if you smoke you are more likely to get certain diseases,"
"We have of course been aware of the existence of this memo and its publication now does nothing to change our confidence in our ability to defend ourselves against litigation," he added
Clive Bates, director of anti-smoking group Action on Smoking and Health (ASH), said: "This is the great beauty of litigation - their internal documents show what they really knew and how they behaved, and their top executives have to take the stand under oath. Litigation means the truth does actually come out and the PR waffle gets taken to pieces."
The next stage in the UK action by lung cancer victims will take place on 3 April when a judge will be named for the case. The full trial is now expected to take place next year, after the claimants recently won the right to fight on under a no-win, no-fee agreement with their solicitors.