UPDATE 3-Landmark US tobacco regulation bill goes to Obama

* House passes final version of tobacco bill, 307-97

* Obama hails measure, will sign it into law

* Health groups laud bill, smaller companies disappointed (Adds analyst comment, background, paragraphs 4, 17)

By Susan Heavey

WASHINGTON, June 12 (Reuters) - A landmark bill giving the U.S. government broad regulatory power for the first time over cigarettes and other tobacco products won final approval in Congress on Friday, and President Barack Obama said he would quickly sign it into law.

The U.S. House of Representatives passed the legislation in a 307-97 vote one day after it secured Senate approval. It marked the culmination of a quest by tobacco industry foes in Congress dating back more than a decade to put cigarettes under the control of the U.S. Food and Drug Administration.

The bill allows the FDA to put stringent new limits on the manufacturing and marketing of tobacco products but stops short of banning cigarettes or their addictive ingredient nicotine.

Nearly 20 percent of Americans smoke, and tobacco use kills about 440,000 people a year in the United States due to cancer, heart disease, emphysema and other ailments, officials say.

"This legislation ... will protect our kids and improve our public health," Obama, who has admitted his own battles to quit smoking, said after the House vote. "So I look forward to signing it."

Under the plan, the FDA for the first time will monitor and inspect tobacco companies. Cigarette makers must pay hundreds of millions of dollars in fees, register with the agency, and provide a list of all the products they make.

The measure also calls for larger warnings on cigarette packages, restricts vending machine sales, bans most flavored products and further curbs print advertisements targeting children. The FDA also will have final say over new products and marketing claims such as "light" and "low tar."

Health advocates backed the plan, saying it would reduce smoking, prevent disease and lower soaring healthcare costs.

House Energy and Commerce Committee Chairman Henry Waxman, whose helped lead the effort, said FDA oversight will rein in an industry known for aggressive marketing efforts.

'LAST GASP'

"We are today at the last gasp of the tobacco industry's efforts to protect their profits at the expense of the health and lives of the American people and to get children to take up this habit," Waxman said.

With the exception of Altria Group Inc's (MO.N) Philip Morris unit, the largest U.S. cigarette maker, tobacco companies opposed the plan, saying it would hamper their ability to bring new, safer products to market.

Regulation of the tobacco industry until now has been cobbled together by states, court rulings and other U.S. agencies such as the Federal Trade Commission.

Much of the authority would now be in the FDA's hands.

Last month, a U.S. appeals court found that cigarette companies lied for decades about the dangers of smoking and ordered them to launch advertisements highlighting the risks.

"Tobacco is such a serious and compelling public health problem, and we really do feel by being able to regulate tobacco and tobacco products we can reduce the burden of disease and help promote stronger smoking-cessation efforts," FDA Commissioner Margaret Hamburg told reporters.

The agency will "have a lot of leeway to dictate the terms of the business going forward," said Mark McMinimy, an analyst for Washington Research Group.

Critics have questioned whether the FDA is ready to handle an entire new sector after struggling through recent troubles involving tainted food and drug safety issues.

Some experts have said the bill essentially seals Philip Morris' position as market leader. Reynolds American Inc's (RAI.N) R.J. Reynolds Tobacco unit and Lorillard Inc's (LO.N) Lorillard Tobacco Co. have spoken out against the plan.

"It's going to make it almost impossible for any new product to enter the market," said Dr. Michael Siegel, a professor at Boston University's School of Public Health.

Critics like Siegel said the bill did not go far enough.

Lawmakers could have banned nicotine as well as popular mint-flavored menthol cigarettes, raised the legal age to buy tobacco products from 18 to 21 and restricted sales to certain stores, much like alcohol, Siegel said.

If the measure does curb smoking, as advocates hope, there could be another impact: shrinking government revenues. Cigarette taxes help fill state and federal coffers.

Obama this year signed legislation expanding a popular public health insurance program for low-income children that was paid for with a 62-cents-per-pack tobacco tax increase.

(Editing by Will Dunham)