The no-smoking rule will be extended to schools and universities and elderly and nursing homes, which will be given a grace period of three months from the date the legislation takes effect.

But in recognition of what the government terms 'consideration of human rights, privacy and enforceability of non-smoking policy', exemptions are proposed for a range of places where most users are smokers.

These include commercial bathhouses, mahjong parlours, buildings under construction, staff dormitories, guest rooms and suites in hotels and guesthouses, as well as smoking rooms in airport passenger terminals and correctional institutions.

A government source said the move to ban smoking in restaurants and bars would give the catering industry a 'level playing field' to protect the interests of business owners who had banned smoking.

The plans also propose a range of restrictions on the sale of tobacco products.

They include a ban on selling cigarettes in conjunction with non-tobacco products to attract sales. This follows complaints to the Health, Welfare and Food Bureau about bundled selling of tobacco products and cut-price non-tobacco products such as lighters.

Restrictions are also planned on the use of brand names in events sponsored by tobacco companies.

The plans said the bureau had found that in some events jointly sponsored by tobacco and non-tobacco companies, promotional materials had been designed to make the tobacco brand name most prominent.

The government also plans to increase the size of health warnings on tobacco packaging from the present 20 per cent of the surface area of the packet to at least 50 per cent, as well as including pictorial and graphic content. The words 'light' or 'mild' that suggest lower health risks will be banned.

Anthony Lock Kwok-on, managing director of the California Red Karaoke Box chain, said the ban could cut takings by 30 per cent.