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British American Tobacco Australia (BATA) began producing its Dunhill "wallet" packs last year, nicknamed the "iPod cigarettes" because of their size and...

A controversial cigarette packet has been permanently removed from sale after the Australian Competition and Consumer Commission took a tobacco giant to the Federal Court.

British American Tobacco Australia (BATA) began producing its Dunhill "wallet" packs last year, nicknamed the "iPod cigarettes" because of their size and design.

The pack folded open, allowing it to be split into two. The health warnings were then largely unseen.

One side of the packet held 13 cigarettes, and the other seven. The larger side did not show the graphic images required by law to be displayed on cigarette packaging.

The ACCC had taken action against BATA, alleging the production of the wallet packs did not comply with regulations relating to the labelling of tobacco products.

After the Federal Court made orders against the company, including a consent agreement that BATA would not supply the wallet packs in future.

It also agreed not to produce similar packs.

Anti-smoking groups were critical of the packaging when it first emerged, fearing it may be seen as a novelty by young people.

ACCC chairman Graeme Samuel said the government had amended labelling regulations in February this year to clarify the law.

"The ACCC is committed to taking action to ensure that companies meet the strict labelling requirements for health warnings on tobacco products," Mr Samuel said.