The PM, his pro-smoking aide, and a dirty war over cigarette packaging

The independence of a Government adviser on red tape appointed by David Cameron has been called into question as details emerge of a possible covert attempt by the tobacco industry to undermine the proposed introduction of plain cigarette packets with no branding or company logos.

Anti-smoking campaigners have voiced concerns that Mark Littlewood, the director of the Institute of Economic Affairs (IEA), has been appointed as an "independent adviser" to the Government's Red Tape Challenge, which they believe might allow him to influence policy on plain cigarette packets.

Mr Littlewood is well known for his robust views on anti-smoking legislation and in the past his institute has received funding from the tobacco industry – although it refuses to say whether this is still the case.

The All Party Parliamentary Group on Smoking and Health has asked Vince Cable, the Trade and Industry Minister, for reassurances that Mr Littlewood will not be advising on tobacco-related matters because of his "clear conflict of interest".

"He clearly has a pro-tobacco agenda and has campaigned for a number of years against regulation of the tobacco industry. He could not, therefore, fulfil the remit of an independent adviser to the Government," said the committee chairman, Stephen Williams MP, in a letter to Mr Cable.

Jean King, director of tobacco control for Cancer Research UK, said: "For any organisation to promote a report saying that plain packaging can't and won't work without making clear that the authors are tobacco industry apologists is unacceptable. The IEA must come clean and confirm whether or not it continues to be funded by the tobacco industry."

Deborah Arnott, chief executive of the anti-smoking organisation ASH, said: "Mark Littlewood is not independent, he has nailed his colours to the mast by supporting the tobacco industry-funded campaign against plain packs, just as he did its campaign to bring smoking back to our pubs."

Mr Littlewood was unavailable but the IEA said that the scope of his involvement in the Red Tape Challenge did not include plain cigarette packaging, although Mr Littlewood has publicly opposed its introduction.

In a statement to The Independent, the Department for Business said that Mr Littlewood would not be involved in any tobacco-related matter.

Tomorrow, Mr Littlewood's IEA will host the launch of a controversial report arguing that plain cigarette packets are illegal and will do nothing to improve the health of smokers or non-smokers. The authors of the report, called The Plain Truth, have strong financial ties to the tobacco industry.

One of them, John Luik, a Canadian philosopher, is reported to have received tens of thousands of dollars from tobacco companies. He has also been accused twice in the past of fabricating details of his professional qualifications. The second co-author, Patrick Basham, has worked for private American think-tanks that have been part-funded by cigarette firms. Campaign groups believe that their report launched tomorrow at the IEA marks the start of a covert attempt by the tobacco industry to undermine the Government's public consultation on plain packaging, which is expected to be announced within weeks.

They point out that tobacco companies have a history of using third parties with no obvious links to the cigarette industry to influence public opinion.

In its publicity for the launch of The Plain Truth, the IEA makes no mention of the fact that Dr Luik has received substantial funding from the tobacco industry and that Dr Basham has worked for two American think-tanks that have accepted money from cigarette companies.

Neither does it mention that Dr Luik was dismissed from two academic institutes in Canada for misrepresenting his professional qualifications. He was dismissed in the 1980s from Nazarene College, Winnipeg, and discharged in 1990 from Brock University, Ontario, where he taught applied professional ethics, for fabricating his qualifications. In 2001, it emerged that Dr Luik was paid a six-figure sum by the tobacco industry to edit a book on plain cigarette packaging. He has accused anti-tobacco research of being "fraudulent" and has questioned whether cigarettes are addictive.

Responding to email enquiries, Dr Luik said: "I always find it interesting that the only issue in which ad hominem attacks are raised is the tobacco issue and from the anti-tobacco movement. This says a lot about their inability to engage in arguments solely on the basis of logic and evidence. In any instance, I neither engage in ad hominem argument nor respond to it."

Dr Luik said that he received funding from the tobacco industry, along with several other sources of finance, but added: "Such funding could compromise my research if the funder determined the research agenda or if the funding were contingent on producing findings that were pre-determined by the funder. Fortunately, I have been given non-contingent funding which has allowed me great liberty to pursue a research agenda of my choice."

However, tobacco industry documents dating to the 1990s revealed that draft copies of one of Dr Luik's academic papers on second-hand smoke were circulated among the industry for comments prior to final publication

Dr Basham, meanwhile, has worked for the Fraser Institute in Vancouver and the Democracy Institute in Washington, which have both received funding from the tobacco industry. While at the Fraser Institute in 2000, the institute wrote a letter to British American Tobacco pointing out that Dr Basham was willing to carry out research on risk and regulation in return for funding.

"What we are proposing is a high-calibre centre that will involve senior analysts, and will use a variety of resources and tools, to provide the factual information that will seriously counter the risk activists and their misleading and misguided propaganda," the letter said.

Dr Basham said that he is not a consultant and does not accept project-specific funding. He said he has never felt under pressure to write a report that would please the tobacco industry and insisted that the source of his funding has never influenced his conclusions in relation to any tobacco-related matter.

"There is minimal evidence to give any indication that a plain-packaging ban would do anything to advance public health. In fact the evidence that there is would suggest that it would be counter-productive," Dr Basham said.

"There is also the small problem of a plain packaging ban being illegal, according to international treaties that the UK and others have signed," he added. Anti-smoking organisations, however, said that citing the illegality of plain packaging is a standard tobacco industry line, and is disputed by independent legal experts.