A total ban on tobacco advertising - with the aim of cutting the number of young smokers - came a step closer on Monday.

The Tobacco Advertising and Promotion Bill passed its second reading by 316 votes to 11 as MPs rejected Conservative opposition plans by 127 votes. Shadow health spokesman Liam Fox had claimed there was insufficient evidence to justify a ban. Anti-smoking campaigners Ash had earlier hit out at Fox's stance as a "flat-earth claim that didn't stand up".

The bill, which received its first reading in December last year, is a sensitive issue for Labour, following the Bernie Ecclestone affair. Ministers were accused of changing their policy on tobacco sponsorship as a result of a million pound donation to Labour from the Formula One boss prior to the last general election.

The government says it will "ban the advertising and promotion of tobacco products in the UK in line with government targets to target smokers". Ministers have been at pains to stress that smoking kills 120,000 people a year in the UK and is the biggest cause of coronary heart disease in young and old.

The bill will outlaw all forms of tobacco advertising and sponsorship - including shop frontages, poster hoardings and magazine advertisements. Ministers say they recognise that particular sports, most notably Formula One, are hugely reliant on the cash generated through tobacco sponsorship. As a result Formula One is to secure an extended exemption from the laws and will have until 2006 to secure alternative sponsorship deals. Specialist tobacconists will also be exempt from certain elements of the legislation.

The legislation is similar to EU legislation which attempted to ban advertising of cigarettes and related products across the EU as a whole. This was challenged by tobacco manufacturers in the European Court of Justice in October last year. The European Court, which found the directive to be outside EU law and that the Commission had no power to introduce it, said it would go against competition. UK ministers say they have taken onboard the lesson from the EU and are confident that their bill will not suffer the same fate.

The legislation is aimed at meeting targets set out in a government white paper to cut adult smoking from 28 per cent to 26 per cent in 2005. The Department of Health has set targets to reduce smoking among children from 13 per cent to 11 per cent in 2005. The government has estimated that a ban on tobacco advertising would eventually lead to a 2.5 per cent reduction in the number of smokers, possibly saving 3000 lives a year.

British American Tobacco has repeated its offer to work with the government to help ensure that the bill was "reasonable, workable and fair to competing companies".

Michael Prideaux, BAT's corporate affairs director, said: "Our companies around the world have a strong track record of working with governments to agree appropriate standards for tobacco marketing and to help deliver sensible regulation. We are willing and able to work constructively with the UK government, and hope the government will accept our offer in the genuine spirit with which we make it."

He said: "We have long held the view that advertising bans do not help to reduce smoking, nor prevent under-age smoking. However we respect the government's concerns. We already comply with strict voluntary marketing controls in the UK, and are willing at all times to discuss what responsible marketing means today, and how we can co-operate in meeting changing expectations."