The key figure was James Buchanan Duke, head of ATC, whose aggressive methods had created a virtual monopoly for the company in the US.

Individually, British companies, even those of the size of WD & HO Wills and John Player & Sons, could not survive.

Duke then approached other British companies and is reported to have burst in on the Player brothers, saying: "Hello, boys. I'm Duke from New York, come to take over your business."

He was politely shown the door, an experience repeated at other companies. Facing such resistance, he paused for reflection.

This pause gave 13 family-run businesses, led by Wills, Players and Lambert & Butler, time to meet and, in December 1901, The Imperial Tobacco Company (Great Britain and Ireland) Limited was formed.

The obvious choice for chairman was Sir William Henry Wills, who became Lord Winterstoke in 1906.

Even so, the companies continued to trade under their own names and retained responsibility for their own manufacturing and selling.

Through Ogden's, ATC began cutting prices and offering free gifts in the UK - tactics that had served it well in the US. But Imperial frustrated ATC at every turn.

It acquired the retail business of Salmon & Gluckstein and also set up a customer bonus scheme, whereby a proportion of Imperial profits was distributed among wholesale and retail customers.

After suffering heavy losses in the UK, and faced with a trade war at home, ATC was ready to talk.

In September 1902 an agreement was reached - ATC surrendered Ogden's to Imperial while Imperial abandoned plans to enter the American market, except for leaf buying.

The result was the formation of the British American Tobacco Company Limited (BAT) and the agreement remained in place until 1911 when, under an anti-trust ruling in the US, ATC was split into four main companies. One kept the ATC name and the right to continue selling a number of Imperial brands in the US, leaving Imperial free to export any of its other brands to the American market.

Until 1973 Imperial's trade was almost entirely limited to the UK and the Republic of Ireland while BAT confined itself, in the UK, to manufacturing for export and the duty-free trade. Imperial Tobacco owned some of BAT's brand names in the UK, while BAT owned most of Imperial's in Western Europe. Only in 1973 did each company, broadly, regain control of its own brand names in the UK and Western Europe.

By 1980 Imperial had sold off its last financial holding in BAT, although many trade marks owned by the company in the UK still remain the property of BAT outside Europe.