* MEP wants Europe to follow Australian tobacco logo ban
* Firms question impact on smoking, see fraud risk
* Proposal prompts renewed lobbying push by industry
By Claire Davenport and Charlie Dunmore
BRUSSELS, April 19 An influential EU lawmaker has proposed strengthening draft European anti-tobacco rules by banning all distinguishing branding from cigarette and tobacco packets, following the example set by Australia.
The tobacco industry has begun lobbying against the idea, and if a ban won backing from EU governments and the European Parliament, it could face a legal challenge from companies such as Philip Morris and Imperial Tobacco.
"The idea is to take the advertising off the packages," Linda McAvan, the British Labour politician leading talks on the tobacco proposals in the European Parliament, told Reuters in a telephone interview.
"It is aimed at stopping a new generation of smokers from being recruited, and I think most fair-minded people would probably agree that is a good idea," she said.
The European Commission proposed in December tough new restrictions on tobacco branding to reflect the deadly threat posed by smoking, but stopped short of a ban on all logos.
Instead, the bloc's executive body said graphic visual and written warnings should take up 75 percent of the surface of all cigarette and rolling tobacco packets, leaving 25 percent or less for branding.
Australia imposed its logo ban in December, saying research showed that the absence of distinctive branding on cigarette packs makes smoking less attractive to young people. The tobacco industry lost a legal challenge to those rules.
Asked whether a logo ban would cut EU tobacco sales further than the Commission's proposal, McAvan said: "By the amount of lobbying we are hearing, I think the cigarette companies must think it has an effect."
But tobacco firms question whether removing branding will influence consumption and say it would encourage counterfeiting.
"There is just no credible evidence to suggest that it will achieve what its proponents think it will achieve," Imperial Tobacco spokesman Simon Evans said.
McAvan said she backed most of the Commission's other proposals, including bans on tobacco flavourings such as menthol and clove, and slim or novelty cigarette packets.
She had not yet decided whether to propose new measures on water pipes or hookahs, but would ask experts and national regulators for assessments of their attractiveness to young people.
About 28 percent of the European Union's 500 million citizens smoke, exceeding rates in other regions such as the United States, with 18 percent, and Brazil, with 15 percent.
EU laws can take up to two years to finalise, but McAvan said she would try to have agreement on the rules before European Parliament elections in mid-2014, to avoid long delays.
The European Commission proposed its bill after two years of preparations - a period also marked by heavy lobbying and the forced resignation of former EU health commissioner John Dalli, following a cash-for-influence investigation.
Dalli was forced to step down in October, after an EU anti-corruption investigation found he was aware of a request for 60 million euros ($79 million) by one of his associates in return for proposing to lift an EU sales ban on a moist oral snuff known as "snus", made by tobacco firm Swedish Match .
Strict World Health Organisation rules govern any contact between politicians and the tobacco industry, and apply to all members of the European Parliament.
McAvan said the tobacco industry appeared to be using retailers as a proxy to try to get around those rules and influence EU lawmakers.