All Cubans 55 or older are allocated four packs of cigarettes a month for about 25% the normal price, but this privilege is being ended in September.

The measure is President Raul Castro's latest attempt to cut the communist state's spending.

The island has been hit hard by the global economic downturn and the long-term US trade embargo.

A statement in the government-run Granma newspaper said the move was "part of the steps gradually being applied to eliminate subsidies". The health benefits were not mentioned.

Cigarettes are the latest item to be removed from ration books. Subsidised peas and potatoes were eliminated in November.

Earlier in August Mr Castro said the role of the state would be reduced in some areas, to cut the "overloaded" state budget.

He said more workers allowed to be self-employed or to set up small businesses.