TOBACCO SETTLEMENT WORTH $206 BILLION

NEW YORK -- Big Tobacco would pay $206 billion to settle the remaining state
claims over the costs of treating sick smokers under an agreement reached
Saturday with eight states, the Washington state attorney general said.

The settlement proposal, which would salvage parts of a broader tobacco
agreement that died in Congress earlier this year, would also place new
limits on how tobacco makers market their products.

Negotiators for the nation's four biggest tobacco companies and eight state
attorneys general completed their review of the agreement Saturday
afternoon. They were shipping copies of the documents to state attorneys
general across the country for their approval.

``We have finished,'' said Attorney General Christine M. Gregoire of
Washington state, who led the states' team during more than five months of
negotiations. ``We have done the best we can do here.''

Details of the agreement are expected to be announced Monday. Until then,
tobacco spokesman Scott Williams said, the industry would not comment.

If enough states embrace the plan, it would be the biggest U.S. civil
settlement ever.

The settlement is a creation of state attorneys general, with no involvement
by federal officials. Unlike earlier efforts at a more comprehensive plan,
it avoids the issue cigarette makers fear most: regulation of their industry
by the Food and Drug Administration.

But because it involves only state governments, it is likely to return the
focus of the nation's debate over smoking back to the Congress and the White
House.

Since the defeat last spring of a Senate bill that would have cost the
industry $516 billion, the Clinton administration, which backed it, has done
little.

Many anti-smoking advocates believed the proposed Senate bill would have
brought a sea change in the nation's war on smoking. Now they appear to
accept that change will come incrementally.

``These are chapters,'' said Dr. David Kessler, the former FDA commissioner.
``You don't solve huge public issues in a single swipe. This is going to
take a series of steps.''

Anti-smoking groups look to the White House for the next step, hoping the
Clinton administration, in light of a recent court ruling denying the FDA
authority over tobacco, will move quickly to propose legislation when
Congress reconvenes.

Just a year ago, smoking opponents seized on the $368.5 billion settlement
accord reached in June 1997 between cigarette makers and 40 state attorneys
general to help fashion a $516 billion Senate bill. It would have forced
cigarette prices up, handed the government regulatory power over tobacco and
denied the industry legal protections in smoking-related lawsuits.

But anti-smoking groups, in a fevered rush to vanquish, badly miscalculated.
Tobacco companies, long skilled at defeating legislation, unleashed a $50
million advertising blitz that sank the bill.

Since then, the tide has turned. New court rulings consistently favor the
industry, and some anti-smoking groups appear to have lost their focus. Last
year, their message centered on saving the legions of under-age smokers who
face early deaths; these days, they are warning the public about a tie
between smoking and impotence.

The New York Times and Associated Press contributed to this report.

Checked-by: Rolf Ernst