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George Osborne: "I think it's right that we take our time and get the right decision"
The government has denied claims it has caved in to the tobacco industry after plans to introduce plain cigarette packaging in England were put on hold.
A decision has been delayed so more time can be spent examining how similar plans have worked in Australia.
Health minister Anna Soubry said she "would never give into pressure" and awaiting more evidence was "sensible".
But Labour said it was a "humiliating u-turn" and questioned the input of Tory election strategist Lynton Crosby.
Health campaigners and doctors groups have criticised the move, which comes as the government confirmed plans to set a minimum price for alcohol in England are to be formally abandoned.
David Cameron was a vocal advocate of minimum pricing as away of tackling drink-related health and social problems but he appears to have been defeated by ministers who feared it would not work and prove unpopular with voters.
BBC political correspondent Ben Wright suggested the Conservatives were trying to jettison potentially unpopular policies in order to focus on their core economic message in the run up to the next election.
Ministers had also been keen to go ahead with the cigarette packaging proposal, designed to discourage young people from smoking by making the packets less attractive, after the Department of Health held a consultation last year.
Under the plans, the standardised packets would all be the same colour, with the same font, and carry a prominent graphic warning.
'Important decision'But Health Secretary Jeremy Hunt said the government wanted to see how the policy had worked in Australia, the first country to introduce plain packaging last year, before making a "final decision".
Analysis
"The evidence is clear that packaging helps to recruit smokers."
That was the view of Andrew Lansley, then Health Secretary in 2010.
Since then the government has held a consultation, before which it said it was open-minded.
Now the idea will be put on pause, with no timetable for making a final decision.
Ministers will say they want to see how the policy works in Australia.
Labour says the government just wants to "please its friends in big business".
And with the opposition targeting the Conservative election strategist Lynton Crosby, they will seek to make this an argument not just about public health, but lobbying.
He said a public consultation on the issue, the details of which have been published on Friday, had shown that the debate was "high polarised" with "strong views" about the effectiveness of the policy on both sides.
Ministers said 53% of those responding to the consultation were in favour of plain packaging while 43% had urged the government to take no action on the issue.
In an urgent question in the Commons, shadow health minister Dianne Abbott said the "disgraceful" announcement showed the government had "caved in to big business" and the "health of the nation has been sacrificed to the interests of big tobacco".
"We have to ask on this side of the House what happened," she added. "We suspect that Lynton Crosby happened."
'Day of shame'Mr Crosby's lobbying firm Crosby Textor was employed by British American Tobacco in Australia, but the company said the lobbyists did not work on its campaign against plain packaging there.
Asked what evidence Labour had of Mr Crosby's direct involvement, Mrs Abbott said she was not saying "he is influencing public health decisions per se" but suggested he had told senior Tories that this and other policies would give them "problems with UKIP".
"Start Quote
End Quote Tobacco Manufacturers AssociationPlain packaging would have been an assault on UK business in the midst of difficult economic times"
But health minister Anna Soubry told MPs this was a "complete red herring" since Mr Crosby had not had any conversation with a health minister on the issue. Asked when she last spoke to him, she said it was in 2004.
And No 10 said Mr Crosby had had "no involvement" in the decision and had never lobbied David Cameron on the issue.
The decision to delay the plain packaging decision was attacked by Conservative MP Sarah Wollaston, a former GP, who said on Twitter it had been done for "political expediency" and it was a "day of shame" for the government.
But Conservative colleague Peter Bone said "evidence-based" policy making was right and changes should not be "rushed through".
Cancer Research UK said the decision would cost lives while the British Lung Foundation said the delay was "bewildering".
The British Medical Association said packaging was a "key tool" for the industry to attract young smokers.
"It is deeply disappointing that the government has given in to the pressure from the tobacco industry," Dr Vivienne Nathanson, its director of professional activities, said. "This is another example of a government which claims to have prioritised public health putting vested interests over those of the public."
But pro-smokers' group Forest said ministers had "listened to ordinary people" and it was good news for those who "believe in consumer freedom and are opposed to excessive regulation".
'Scotland committed'The Tobacco Manufacturers Association said the government should look at alternative measures, such as tackling the black-market trade and sales to under-aged smokers.
"Plain packaging would have been an assault on UK business in the midst of difficult economic times," it said.
"Plain packs would be far easier to copy and would have therefore been a gift to the criminal gangs behind the increasing illegal trade in tobacco which costs the UK Treasury up to £8m per day in lost tax revenue."
The Scottish government says it is "still committed" to introducing plain packaging.
The BBC understands Scottish ministers had expected to see how the policy was introduced in England before seeking to approve the same or similar legislation but are now expected to press ahead with their own plans.
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