SAN FRANCISCO, Jan 31 (Reuters) - A coalition of some of the state's largest medical groups has shelved an initiative drive to require California to use its share of the $206 billion tobacco settlement on health care, a coalition spokesman said Monday.

The groups, which include the California Medical Association and the American College of Emergency Physicians, on Friday received clearance from state officials to begin collecting signatures to get their proposals on the November ballot. The drive began after California Gov. Gray Davis vetoed legislation last September that would have set aside half of California's $25 billion tobacco payout in a fund to expand health care. But the Democratic governor's $88 billion budget proposal in January included enough funding for health-related programs to cause the proponents of the measures to put their bid on hold. ``We are going to pursue our goal through legislation,'' Trish Beall, a spokesman for the California Medical Association said in a telephone interview. ``If we need to, we will do it in two years.'' California received in December a $315 million check as the first installment of its estimated $1 billion a year payout from the 25-year settlement reached in November 1998 between the tobacco industry and 46 states. The state government of California is slated to receive 50 percent of that payout, with the state's counties getting 45 percent and the cities of Los Angeles, San Jose, San Diego and San Francisco sharing the remaining 5 percent. The two initiatives would have required state and county governments to use their share of the money on health care. Cities, however, would be able to spend the funds in whatever manner they saw fit. Some California counties have considered spending their tobacco money in areas other than health care. Orange County has voted to use its windfall to reduce debt and build new jails. Members of the coalition have said, however, that they are still considering an initiative drive within Orange County to regulate how that municipality spends its tobacco money.

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