EU health ministers met in Brussels on Thursday to discuss new restrictions on the manufacture and labelling of tobacco products.

Health minister Gisela Stuart represented the UK in talks on controversial EU directives which could see the introduction of larger, more shocking warnings on cigarette packets. However, the European helath ministers have sent the legislation, which received its second reading in the European parliament on Wednesday, to conciliation - a process triggered when the council, commission and parliament are unable to agree. It is not yet clear which aspects of the proposals ministers were unable to agree upon.

The proposals for new packaging legislation caused controversy with the new shocking warnings, graphic pictures and enlarged warnings occupying between a third, on the front, and half, on the back, of cigarette packets. Currently EU legislation requires cigarette health warnings to cover a minimum of four per cent of the pack, the UK has opted for six per cent.

The MEP Jules Maaten, who reported to the European parliament on the legislation, says that the new graphic warnings - which include colour pictures showing the consequences of smoking, such as amputation - are meant to shock, citing Canadian research that shows a greater impact particularly on young people who don't yet smoke. He defends a shock new warning - "Passive smoking harms those around you, especially children" - saying that "people should be aware of the issues of smoking with children present".

Another of the measures discussed by ministers bans the manufacture of cigarettes containing over 10mg of tar from January 2005.

Michael Prideaux, a spokesman for British American Tobacco, has described the proposal as a de-facto export ban, hitting the manufacture of export-only cigarettes and benefiting US competitors. He argued that the ban could lead to 1,800 direct job losses, with the loss of a further 6,000 jobs among suppliers.