The Scottish Government would be "very confident" of defending plans to bring in plain packaging for cigarettes if there was a legal challenge from tobacco companies, the Public Health Minister said.
Michael Matheson insisted that introducing plain packs for cigarettes and other tobacco products was necessary to help Scotland "build a generation free from tobacco".
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He was speaking after reports claimed the industry was ready to sue the Scottish Government for £500 million if plain packs are introduced north of the border.
The Scotsman said tobacco giant Philip Morris had based the £500 million figure on the loss of intellectual property rights.
But anti-smoking campaigners at ASH Scotland warned any legal action by cigarette firms was "unlikely to succeed".
Last week MSPs unanimously backed a motion at Holyrood that would allow any future legislation on plain packaging that is brought in by the UK Government to apply north of the border too.
Westminster is set to make a final decision on whether plain packaging should be introduced in the coming months, after an independent review is published.
But Scotland would still be able to press ahead and introduce the change, if Westminster opted not to go ahead with the move.
Today, Mr Matheson said: "We are determined to see Scotland remain at the forefront of countries committed to bold action to reduce the harm caused by tobacco. The necessary legislation is likely to be passed by the UK Government, after the Scottish Parliament last week unanimously backed a Legislative Consent Motion allowing them to do so.
"We would be very confident of defending any legal action from tobacco companies, having done so successfully on every previous occasion that they have taken legal action against the Scottish Government. We also note that Australia has had plain tobacco packaging in place for over a year."
He added: "To build a generation free from tobacco it is necessary to restrict the imagery and designs that could pull in another generation to use these addictive and lethal products - and no amount of sabre-rattling from the tobacco industry will deter us from striving to achieve that."
ASH Scotland chief executive Sheila Duffy said the reported threat of legal action from the tobacco industry was "predictable, but unlikely to succeed".
She said: "We know from bitter experience that tobacco companies resort to the courts when public health measures threaten their profits - and they have plenty of money to fund these cases.
"Plain packaging does not deprive tobacco companies of their trademarks and branding. Instead it puts reasonable limitations on their use - so that they can't be flashily displayed on packaging to increase the appeal of tobacco products to children and hook a new generation into a harmful addiction.
"Plain packs are already working successfully in Australia and the High Court in that country has ruled that they don't infringe intellectual property rights."
She added: "The tobacco industry's bullying tactics almost always fail and we believe they will lose again if they challenge plain packaging in Scotland."
A spokesman for Philip Morris International said: "Discussion about legal action at this point is speculative and as a company we take these decisions seriously and on a case by case basis."
He added: "As the government contemplates this policy, we believe it is our responsibility to ensure the serious legal issues as well as the negative consequences of plain packaging, not just for our business but also for the economy overall, are part of the debate.
"In Australia, plain packaging is failing to cut smoking but has led to 77% of small retailers in a recent survey reporting a negative impact on their business while the Australian Treasury has lost up to 1.1 billion Australian dollars (£592 million) in just one year due to the record growth in the black market. After having failed to conduct an adequate review before passing plain packaging, the Australian Government is required to study its effectiveness and impact later this year.
"We hope others considering a ban on tobacco companies from putting our own brands on our products will take the time to review the real world impact of this policy before rushing to any decision."