The Prime Minister was accused earlier this year of being influenced by the tobacco companies after it emerged Lynton Crosby, the Conservatives' elections strategist, is a partner of a company that has been involved in lobbying against such proposals.
A ban on branding has been championed by Labour and the Liberal Democrats. It is likely to see cigarettes in plain packs on shelves before the election in 2015 following another report into Australia.
Government sources confirmed that there will be an independent review which will report back in March.
"We always said we'll look at the emerging evidence," the source said. "This is the earliest opportunity to do so." The source confirmed that the Coalition will introduce plain packaging if the review recommends it. Another government source added: "The Government has always said it would review evidence from Australia and this is what we're doing. We've always said that if there was evidence it had a real impact, we would consider it."
It is claimed that pressure from the Department of Health and health campaigners have contributed to the change of heart.
A study in Australia, the first country to implement the measure, found that smokers using plain brown packages were 81 per cent more likely to consider giving up. Campaigners say the use of branded packaging is a key way tobacco companies encourage more people to smoke.
But the Department of Health has raised concerns that the plain packaging could lead to more counterfeiting.
The Times quoted a source who said: "This will nail Labour's ridiculous smears. Now the pressure will be on Labour to get behind this amendment to enable the introduction of standardised packaging."
Luciana Berger, shadow public health minister, called for measures to be taken now, and said: "The evidence to support standardised packaging is clear. The consensus is overwhelming. We don't need any further delay while 570 children are lighting up for the first time every day."
Action on Smoking and Health hailed the expected announcement.
Deborah Arnott, chief executive of the charity, said: "This decision is a victory for public health, for common sense and for future generations."
The Department of Health would not comment on the claims, but said it was due to make a statement today.
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