WASHINGTON (Reuters) - Philip Morris Cos. Inc., the nation's largest tobacco producer, dropped on Monday its steadfast rejection of any move by the Food and Drug Administration to regulate the marketing of cigarettes, The Washington Post reported.

The newspaper quoted Steven Parrish, the company's senior vice president, as saying that Philip Morris was willing to allow the agency to regulate tobacco products, although he said the details would have to be worked out in negotiations. ``I could see at some point in the future an appropriate way to regulate tobacco products,'' Parrish told the Post in a telephone interview, signaling a major shift in the company's stance. The tobacco industry had agreed in the past to some federal regulation in exchange for settling an onslaught of lawsuits by states seeking to recover the costs of treating sick smokers. But that offer was never put into effect because federal tobacco legislation aimed at implementing it failed in a bitter fight in the Senate two years ago. The Post said the issue was revived amid a major effort by Philip Morris to rehabilitate its public image after recent revelations that the tobacco industry knew much more about the dangers and addictiveness of smoking than previously acknowledged. Nonetheless, critics of the tobacco industry hailed the company's statement. The Philip Morris statement is ``a very big step -- an enormous step,'' former FDA Commissioner David Kessler, who led the fight to regulate the tobacco industry, told the paper. ``This is real progress, and there's no question but that we need to move ahead.'' Could Set Tone For Industry Parrish told the Post he was only speaking for his own company, but the turnaround could set the tone for the entire industry, since Philip Morris is by far its dominant player. Other major tobacco companies could not immediately be reached for comment, the Post reported. Parrish said he would formally announce his proposal Thursday while speaking, along with Kessler and others, at a forum in California sponsored by Columbia University's Center on Addiction and Substance Abuse. He said his company was now willing to be more open with the public and to begin a ``dialogue'' with longtime adversaries. He had few details about how he thought tobacco should be regulated, saying, ``I don't want the world to think that I or Philip Morris would be so arrogant as to say, 'Here's how we think it should be.''' The Post quoted a source familiar with the company's position as saying that Philip Morris would be willing to accept some regulation of the firm's marketing and sales activities. In addition, the company could accept some regulation of the composition of cigarettes, potentially including nicotine levels. But the company would not accept what the industry has called ``back-door prohibition'': requiring nicotine levels to drop so low that the product would essentially be banned. When the FDA first declared that it had the authority to regulate tobacco in 1995, agency officials said they wanted to focus on the industry's sales and marketing activities in hopes of reducing smoking by teen-agers. The FDA's attempt to regulate tobacco was struck down in court, but the Justice Department appealed that decision to the Supreme Court, which heard arguments in the case in December.

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