An Illinois judge ordered that the firm pay $6bn into an escrow account, and also added extra cash and interest payments which will take the total sum over $7bn.

The cigarette firm had said it could not afford to pay the $12bn bond, and one credit agency had warned the firm faced possible bankruptcy.

Philip Morris wants to appeal against a recent judgement which said that it misled smokers into thinking its "light" cigarettes were less harmful than regular brands and ordered the firm to pay $10.1bn.

The bond is required to demonstrate the firm's willingness to meet any financial obligations arising from the case.

Shares in Philip Morris's parent company Altria rose following the judge's decision, closing up 89 cents, or 2.9%, at $31.48.

'Onerous but viable solution'

In addition to the $6bn payment, Philip Morris must pay interest of $420m a year.

It also has to make four $200m payments to the court with the first one due in September.

The judge said Philip Morris had agreed not to appeal against the new bond.

"This is an onerous but viable solution to this issue," said William Ohlemeyer, Philip Morris USA associate general counsel.

"It will allow Philip Morris USA to exercise its constitutional right to appeal, and to make this year's payment under the Master Settlement Agreement (MSA) with the states."

Deadline met

Philip Morris will make its $2.6bn payment under the MSA on Tuesday.

The size of the original bond had raised fears that Philip Morris might not be able to meet the payment, which is part of a settlement agreed in 1998 between tobacco firms and US states.

The agreement imposed a total of $206bn in fines over 25 years to compensate states for the cost of caring for sick smokers.

The states, many of whom need the cash to plug holes in their budgets, had said they would insist on prompt payment of the fine.