European Union diplomats have approved new anti-tobacco legislation, including larger health warnings on cigarette packets and the union's first ever rules on electronic cigarettes.

"Agreement on the tobacco directive is a big step towards a healthier and more prosperous society," said Lithuanian health minister Vytenis Povilas Andriukaitis.

Lithuania currently holds the rotating EU presidency.

The deal was struck after governments and the European Parliament resolved a dispute over how tightly to regulate the booming market for e-cigarettes.

Some analysts have predicted it will eclipse the €500bn-a-year regular cigarette market in ten years.

Under the agreement, most e-cigarettes will be sold as consumer products rather than as more-tightly regulated medical devices, as governments had initially wanted.

But while popular refillable e-cigarettes will be allowed, the European Commission could impose an EU-wide ban in future if three or more member states prohibit them on health grounds.

From 2016 when the rules changes will take effect, cigarettes, rolling tobacco and other products will have to carry graphic picture and text warnings covering 65% of the front and back of packets.             

The rules also include a ban on smoking tobacco products containing flavours such as fruit or vanilla.

Menthol cigarettes will be banned four years later, after some governments demanded a slower phase-out.

"I firmly believe that prominent visual warnings will serve as effective reminders of the severe health consequences of smoking and help people make well-informed choices," European Health Commissioner Tonio Borg said.

"And the prohibition of characterising flavours such as fruit or menthol, which appeal to young people, will make smoking initiation less appealing."

The deal is now expected to be formally approved by EU ministers and the full parliament before entering force next year.

Elsewhere, the Government has won a vote on a Private Members' Bill on tobacco lobbying put forward by Senator John Crown.

Senator Crown's bill was defeated by 25 votes to 23.

The Protection of the Public Interest from Tobacco Lobbying Bill was presented by Senator Crown, who is also a Consultant Oncologist.

He said he the aim was to make lobbying for the tobacco industry more transparent.