The claims are based on internal British American Tobacco papers presented in a US court case in Minnesota, which show that the company feared losing smokers, as they died or gave up, and considered developing alternative products that would also be addictive but produce no smoke.
It is the starkest evidence yet that the tobacco industry recognised that the success of its business was based on nicotine addiction.
The document, dating from 1979, is one of 10,000 released in the Minnesota case in which Medicaid, the US state organisation, is claiming the tobacco companies should pay the costs of treating tobacco related diseases.
Ash, the anti-smoking charity will today call on the Commons health select committee to investigate the tobacco business so that the document and others like it can be released in the UK. Clive Bates, director of Ash, said: "The document shows the chilling logic of a company understanding that its whole business depends on addicting its customers to nicotine, but recognising that its harmful effects are a strategic threat to its customer base."
The memo, dated 28 August 1979, records discussions held among staff at BAT's research organisation in Southampton. It says the company is explicitly searching for a "socially acceptable addictive product" involving: a pattern of repeated consumption; a product which is likely to involve repeated handling; the essential constituent is likely to be nicotine or a direct substitute for it; the product must be non-ignitable (to eliminate inhalation of combustion products and passive smoking).
The memo adds: "We also think that consideration should be given to the hypothesis that the high profits additionally associated with the tobacco industry are directly related to the fact that the customer is dependent on the product."
The tobacco industry has never publicly admitted that its products are addictive. Mr Bates said yesterday: "I wish every smoker could read this document. It is the language that is remarkable, taking as its starting point the addictiveness of the product and then explaining how the profits flow from that. It makes a mockery of the argument that smokers have a free choice whether to smoke. If they are made dependent on the product they don't have the freedom not to smoke."
Yesterday the Tobacco Manufacturers' Association was continuing to deny that smoking was addictive, and warned that taking a single document out of context was open to misinterpretation. A spokesman said 11 million people had given up smoking in the last 20 years in the UK undermining claims that the habit was addictive.
"What is addictive? Coffee, tea, sex and shopping are all said to be addictive. We refute the addiction argument and always have done."
He added that the document was "probably an exercise in formulating policy looking at all the various aspects of tobacco and the smoking habit".