Labour MPs will get a free vote on whether to implement a total ban on smoking in pubs and clubs in England later this month.
The offer by ministers follows a Cabinet split on the smoking policy.
Health secretary Patricia Hewitt is expected to vote for a total ban in licensed premises – against her department’s official policy.
In a recent report, the Commons health select committee said a total ban was the “only effective means” of protecting public health.
But some Conservative and Liberal Democrat MPs oppose a total ban for fear it could undermine civil liberties.