The Government wants to raise the legal age for buying tobacco to 18 - and ban pubs and shops that breach the law from selling tobacco at all.
The Department of Health has launched a consultation detailing three options - raising the limit to 17 or 18 or keeping the limit at 16.
It also wants to introduce a major new penalty which would see those who persistently sell to underage children banned from selling tobacco.
The idea of raising the legal age is to make it easier for retailers to spot underage smokers and help cut the number of youngsters taking up the habit. Around 9% of children aged between 11 and 15 smoke. Although Government figures show 70% of those 11 to 15-year-olds buy their tobacco from newsagents and corner shops, pubs with vending machines will also be affected by the changes. In late 2004, a sting operation in Leicester revealed that 14-year-olds were allowed to buy cigarettes from vending machines in 45 out of 46 pubs tested.
"Smoking is dangerous at any age but the younger people start, the more likely they are to become life-long smokers and to die early," said health minister Caroline Flint. "Access to cigarettes by under-16s is not as difficult as it should be. If a place is known locally as the place for children and teenagers to easily buy tobacco, we want to stop that place selling it."
Trading Standards Institute chief executive Ron Gainsford added: "We believe that changing the age of sale in line with the age limit on, for example, alcohol sales, will help eliminate confusion among retailers."
The maximum fine for underage tobacco sales is £3,500, although prosecution rates are low and fine levels relatively small. In 2004/5 there were just 117 prosecutions, with the maximum fine being £1,000.
The consultation ends on 9 October 2006. Those wishing to submit their views should email underagesales@dh.gsi.gov.uk