The government is to launch an official consultation on removing all promotional packaging from cigarettes by the end of the year.
In April Australia set out plans for new rules which would force tobacco companies to use plain packaging carrying graphic health warnings on all cigarette packages. The move, which comes into effect next July, is the most draconian measure yet to reduce tobacco sales.
Ministers in Britain say they are keen to see how successful the measure is particularly in deterring young people from taking up smoking in the first place. If it is seen to have worked the measure could be adopted in this country.
Sources in the Department of Health said there was unlikely to be any move soon but they were keen to look at all the benefits and potential problems with a packaging ban early so it could be implemented if it was seen to work in Australia.
"The Tobacco Control Plan confirms a commitment to consult by the end of this year on options to reduce the promotional impact of tobacco packaging, including an option to require plain packaging," said a Department of Health spokesperson.
"But we must get this right. Before we publish the consultation we must ensure that we have expert legal advice on the trade, competition, EU single market and intellectual property rights implications.
"We must also review the evidence and draw up an impact assessment on the costs as well as the additional public health benefits of policy options.
"Only after this work, and gathering views and evidence from public consultation, will we be in a position to know whether it will be possible to proceed and if so, how."
The measure is strongly opposed by the tobacco industry. In the past the tobacco industry has been suspected of funding campaigns fronted by small retailers to prevent further restrictions on sales.
"That was certainly what I was told when I was Health Secretary," said the former Labour minster Andy Burnham. "But I have to say I never saw any proof."