Pubs will be able to have smokers' rooms despite last month's Government White paper which said there would be an outright ban where food was prepared.
Leader of the Commons Peter Hain paved the way for a U-turn by saying it was "common sense" to allow pubs to apply to local authorities for exemptions.
But his comments have enraged health campaigners who wanted a total ban on smoking by 2008 and will embarrass Health Secretary John Reid.
Ian Willmore, of pressure group Ash, accused the Government of "flailing around" for a way out.
The Sunday Telegraph 27/02/05 pages 1 & 2