A u-turn by tobacco companies has cleared the way for the introduction of a ban on all cigarette advertising and promotions in retail outlets in the Irish Republic, as well as for stricter controls on how products are displayed.

Legislation to enact the restrictions, approved by the Irish parliament three years ago, had been challenged by 16 companies on the grounds they represented an impediment to trade, breached EU law and would be financially damaging.

Backing the challenge were interests involved in supplying cigarettes to vending machines and a newsagent representing a number of retailers.

But in the Irish High Court, PJ Carroll & Co, John Player & Sons and Gallaher (Dublin), the three main companies involved, announced they were abandoning their challenge.

No explanation was offered for the change of mind, but the parties now face a bill for legal costs that is estimated at several million euros.

Junior health minister Sean Power said his department would now begin implementing the ban.

"There is significant evidence that in-store advertising and marketing, together with prominent displays of products, play a significant role in promoting smoking, particularly among young people," he said.