Cigarettes may have to be sold under the counter as part of new Government proposals described as "creepy and authoritarian".
Newsagents and supermarkets may also have to move their cigarettes displays out of view so as not to tempt people to take up smoking.
The "out of sight, out of mind" proposal is part of the Department of Health's consultation to be launched later this spring, which looks at ways to stop children smoking. The relevant legislation could be introduced in the autumn.
But the move has been denounced by critics as further evidence of a growing "nanny state" and another assault on smokers.
Neil Rafferty, a spokesman for the smokers' rights group Forest, said: "This is another attempt by the Government to stigmatise smokers and make them feel bad about themselves.
"It is a creepy and authoritarian measure. Tobacco is a perfectly legal product from which the Government makes more than ?10 billion a year in taxes."
Other measures on the table include the outlawing of vending machines from pubs and restaurants and making nicotine-replacement gums and patches easier to buy.
According to the Department of Health, the strategy - coupled with the ban on smoking in public places - will save hundreds of lives.
Someone who starts smoking at the age of 15 is three times more likely to die of cancer than someone who starts in their late 20s, the department said.
Dawn Primarolo, the public health minister, said: "It's vital we get across the message to children that smoking is bad. If that means stripping out vending machines or removing cigarettes from behind the counter, I'm willing to do that."
According to the Office for National Statistics, the proportion of adults who smoke has dropped from 24 per cent to 22 per cent since the ban was introduced last July. The Government has a target of reducing the proportion of smokers to 21 per cent by 2010.
David Cameron, the Conservative leader, said: "I think this is worth looking at. As someone who struggled with giving up smoking, it helps if you take away some of the temptation."
Shane Brennan, a spokesman for the Association of Convenience Stores, which represents 33,000 shops, said: "This is going to be a massive burden on retailers and we are not sure that the end justifies the means. Cigarettes are already kept behind the counter."
Mark Littlewood, the communications director of the think tank Progressive Vision, said: "Banning the display of cigarettes and vending machines would be petty, pointless and patronising."
"These sorts of ideas are typical of a government who seem hell bent on intervening in every single aspect of our lives, however trivial."
Meanwhile, health experts have said that rising cigarette prices are increasing the risk of cancer as more smokers swap cigarettes for cheaper roll-ups.
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