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Mr Cameron said the Coalition had not found evidence that plain cigarette packaging would discourage smoking, and would consider the matter again if this emerges.

However, in a further twist, it emerged that a new report published online by the British Medical Journal suggested that the policy has had some success in Australia.

Labour has already called for an inquiry into whether Mr Crosby's activities breached ministerial standards.

But yesterday, Tim Farron, the Liberal Democrat president, became the first senior figure in his party to intervene in the row.

He told Sky News's Murnaghan programme that it looked "dreadful", adding that there might not be a "fire" but there is "plenty of smoke".

On the same programme, Michael Fallon, a Tory business minister, rallied to the Prime Minister's defence, saying Mr Crosby is an adviser on "strategy" but not "policy".

Mr Crosby, the Australian political consultant, has been hired to advise the Tories on their campaign to win a majority in the 2015 general election.

He masterminded Boris Johnson's two successful bids for the London Mayoralty and has been credited with sharpening the Conservatives' focus since he started working for the party nationally in January.

Reports have suggested that Mr Crosby told Mr Cameron to "get the barnacles off the boat" by concentrating on core electoral battlegrounds and abandoning legislation on unpopular issues.