Defense Secretary John Reid and Foreign Secretary Jack Straw, both former health secretaries, blocked a stricter law that would have required pubs that do not serve food to allow smoking only in an enclosed room, The Times of London reported.
That left Reid and Straw at odds with current Health Secretary Patricia Hewitt and Culture Secretary Tessa Jowell, who backed the sealed-room plan.
The dispute dismayed anti-smoking groups.
John Britton of the Royal College of Physicians said a complete public smoking ban would be extremely popular and if the Irish experience is repeated, would cause one in 12 to give up smoking.
"I don't understand why the government doesn't do the obvious and get on with it," Britton told the BBC.
Another former health secretary, Frank Dobson, blamed the dispute on Prime Minister Tony Blair's waning authority, The Financial Times reported.