The director general of the Cancer Research Campaign, Professor Gordon McVie, said that the ruling would cost "thousands of lives."

A reprieve for sports sponsorship

But Health minister Yvette Cooper re-affirmed the government's determination to ban the adverts.

She said: "We would like to implement a ban at European level because the UK is part of a European market but if that isn't going to be possible then we will implement a ban at UK level."

In court, the European Commission had argued that it introduced the legislation as a way of harmonising different laws across the European Union.

It said the current system, where different member states had different laws, hindered free trade within the EU.

No unanimity

The ban was challenged by international tobacco companies and advertisers in Germany.

We genuinely need European legislation in this area - there are over half a million tobacco deaths a year in the EU

Clive Bates, ASH

In its ruling on Thursday, the court said that the Commission had acted "outside its competence" and that it would go against competition within the European Union.

The Commission believes it will be able to redraft the legislation, still as an internal market matter, to cover certain types of tobacco advertising - such as that in periodicals and magazines and the sponsorship of some events.

'Advertising kills'

Clive Bates, director of the UK pressure group Action on Smoking and Health (ASH) said a ban on tobacco advertising is important.

"People sometimes forget that lives are lost through tobacco advertising. It encourages adults to continue smoking and helps persuade kids to start.

This setback will result in the loss of thousands of lives

Professor Gordon McVie, UK Cancer Research Campaign

"Through a chain of addiction and then disease tobacco advertising ultimately kills people."

He added: ""We hope that the European Commission will study the ruling and have a revised proposal on the table before Christmas.

"We genuinely need European legislation in this area - there are over half a million tobacco deaths a year in the EU and this is one measure that would help."

Professor McVie said: "This setback will result in the loss of thousands of lives and we look to the British Government to stand firm against the tobacco industry's wrecking tactics.

"This is an opportunity for the British Government to lead the way and introduce legislation which goes further than the EU Directive."

A spokesman for the British Medical Association said: "Effective action to curb this cynical and deadly industry is long overdue."

However, Forest, the smokers' rights pressure group, hailed the decision as "good news for all consumers."

"Tobacco is a legal product and consumers have a right to receive legitimate product information," said a spokesman.