Britain has "no plans" to ban smoking in cars in the presence of children, Prime Minister David Cameron's official spokesman has said.
However, the Department of Health is still considering responses to a consultation on plain cigarette packaging.
The Guardian has reported that ministers could announce plans to introduce plain packets later this year.
It said that the legislation would be announced during a speech by Queen Elizabeth in May.
In December, Australia became the first country in the world to put all tobacco products in standardised packs.
Cigarettes and other products there are sold in packaging of a standardised colour, with only the brand name and graphic warnings visible.
"We are going to follow what they have done in Australia," a senior source told the Guardian.
"The evidence suggests it is going to deter young smokers. There is going to be legislation."
In April last year, the British government launched a consultation on plans to introduce mandatory standardised packaging for tobacco products.
Health campaigners have welcomed the proposal, saying that brightly coloured packages are one of the last marketing ploys tobacco companies use to lure people to their products.
However, opponents claim it would lead to increased smuggling and job losses.
Information generated by the consultation, which closed in August, is still being analysed by health officials.