The Department of Health has also laid plans to limit under-age access to cigarette vending machines, in a bid to stop people starting smoking when they are young.
Health secretary Alan Johnson said: “Enticing multi-coloured displays encourage young people to start smoking – we must put a stop to this. Smoking is a habit which is hard to break and causes 87,000 deaths a year in England alone."
The DoH said that countries such as Canada, which have already banned point-of-sale tobacco displays, have found no evidence that shops have had to close as a result – but that smoking among 15 to 19 year olds dropped as a result, from 29% in 2002 to 19% in 2007.
The DoH said in a statement: “Evidence from Canada suggests the costs of refitting stores could be as low as £550 per store. The government will work with trade bodies, provide support and ample lead-in time for compliance to minimise any burden on business.”