A legislation that would have permitted the Canadian government to sue tobacco companies for recovery of smoking-related healthcare costs has beeg rejected by the Supreme Court of British Columbia.

The rejection comes as a major setback for the provincial governments, which had hoped to emulate the success of many US states that have managed to extract huge settlement sums from the tobacco companies. Ontario, Canada's largest province, has said it was considering legal action aimed at recovering around us $40 billion from the companies, while Manitoba and Newfoundland are also considering law suits.

British Columbia, the third largest province, has been the most aggressive of the provinces in curbing public smoking and attempting to restrict tobacco sales. In 1997 the state approved a law that streamlines court procedures for recovering damages from tobacco groups. The law targets three of Canada's largest cigarette manufacturers