Havering Council is still investing in tobacco firms, despite being urged to act ethically by anti-smoking groups two years ago.

Following a Freedom of Information request, The Recorder can reveal that the council currently invests �1.8m in Imperial Tobacco in bonds and equities.

The British company makes Lambert & Butler cigarettes, as well as Golden Virginia tobacco.

Anti-smoking group Ash called on the authority to cut its spending after admitting it had �1.7m of investments in tobacco firms in 2010.

Martin Dockrell, from the group, has now called on the council to follow the example of Luton Borough Council who are reviewing their investments in the tobacco industry.

He said: “At a time when local councils are being given responsibility for looking after public health it looks really bad when they have such large investments in Britain’s biggest killer.

“People will be asking themselves how a council can really tackle the harm caused by smoking when it is the biggest tobacco investor in the area.

“Town Hall pension managers always say they have a duty to get the best return for their pensioners but they also have a legal duty to invest funds in the best interest of their local tax payers.

He added: “Even if you don’t care about the ethics or the conflict of interests, this is a really good time to be getting rid of your tobacco shares.

“Smoking rates are falling, governments from Nigeria to Nunavut are suing tobacco companies for billions and regulations are getting tighter year by year.

“Councils have a choice - Luton proved the point last week when they voted to review their tobacco investments.”

But Cllr Roger Ramsey, Havering Council’s cabinet member for value, said: “It is important to remember that the council does not make the decision on where its pension investments are placed.

“This is down to the discretion of the expert fund managers who manage the pension fund.

“They are always asked to take into account ethical decisions but they should make decisions based on the economic sustainability of the fund.”

The total value of the council’s pensions fund is �403m.