URUGUAY has promised to water down anti-smoking laws after pressure from the tobacco giant Philip Morris, prompting accusations of corporate bullying. The government said it would amend legislation which slaps large health warnings on cigarette packets and bans the sale of those branded as 'light'.

The laws, among the toughest in the world, were introduced four years ago by the then president, Tabare Vazquez, who as an oncologist had seen the ravages of smoking-related cancer. Tobacco advertising and smoking in public buildings were also banned.Earlier this year Philip Morris, which sells Marlboro and other brands in more than 160 countries, filed for arbitration at the World Bank's international centre for settlement of investment disputes, claiming the restrictions hurt its business and violated Uruguay's trade deal with Switzerland. The corporation is based in Lausanne.

Uruguay's government said on Monday it would tweak the legislation, or possibly draft a new law, to fend off the complaint and comply with international trade obligations.

“On some arguments, Uruguay is very strong from a legal point of view and changes aren't necessary. On other points, we need to make changes to the law or come up with a new law,” the foreign affairs minister, Luis Almagro, said.

One mooted change was reducing the size of health warnings from the current 80 per cent of a packet's size to 65 per cent. Another was to permit the sale of 'light' cigarettes. The government said such changes would be minor.

However, Vazquez, a leftist who completed his five-year term in March, accused the tobacco giant of “blackmailing” pressure. “The only thing that Philip Morris is trying to do is show its power over a small country that has set an international example on this issue,” he said.

Vazquez received an award from the World Health Organisation in 2006 for making the South American country, which has a population of 3.5 million, a leader in the fight against tobacco.

Other activists echoed the former president's claim that the government had bowed to pressure to avert a defeat at the World Bank arbitration panel.

Eduardo Bianco, head of anti-smoking group the Centre for Investigation of the Tobacco Epidemic, said “If the country gives way to this pressure, maybe this or some other multinational will try to use another [international] accord to challenge our ban on smoking in enclosed spaces or the advertising ban.”

— The Guardian, London