The college, which helped the Government frame proposals on helping pregnant women to quit smoking in last week's White Paper on tobacco, owns hundreds of shares in Imperial Tobacco, which produces Embassy cigarettes.
The disclosure comes as a severe embarrassment to the college since its members have been offering anti-smoking advice to mothers-to-be for years.
The organisation believed it had an ethical investment policy which avoids share-holding in tobacco or arms firms.
When The Independent on Sunday informed the college about owning 500 shares in the tobacco company it was "appalled" and pledged to sell them immediately. The shares are worth more than pounds 3,000.
"I am appalled at this. We led the campaign against smoking," said Louise Silverton, deputy general secretary. "I am going to have to make sure that we sell [the shares] on Monday. We will be investigating this."
The 500 shares in the London Stock Exchange-quoted company are held by the college's Scottish headquarters, which previously was forced, by its London branch, to sell shares it held in Vickers, the defence manufacturer. The Scottish branch, which is said to operate independently from London, was unavailable for comment yesterday.
Last week we revealed how the British Heart Foundation has invested its employees' pension contributions in a fund that makes money from tobacco stocks. The foundation welcomed the Government's policy on tobacco and cigarette advertising published last week.
The hard-hitting White Paper entitled Smoking Kills includes a chapter on helping women to beat the habit during pregnancy. The Royal College of Midwives advised ministers on how to implement the most effective policy for helping women to quit.
The paper, launched by Frank Dobson, the Secretary of State for Health, says that midwives play a key role in offering support and counselling. It states: "Midwives ... and other health professionals have regular one- to-one contact with pregnant women. These contacts are ideal opportunities to offer support and practical advice on giving up smoking. Evidence shows pre-natal counselling... can double quit rates."Reuse content