WASHINGTON, July 17 (Reuters) - The U.S. Justice Department will hold its first meeting on Wednesday with tobacco companies to begin discussions about a possible settlement of the government's massive lawsuit, a department official said on Tuesday.

The official confirmed that the talks would start, but declined to give any details. In June, Attorney General John Ashcroft decided to set up a three-member team of Justice Department lawyers to pursue settlement negotiations. Major tobacco companies then agreed to meet with the team members. The lawsuit seeks to recover much of the $20 billion spent annually by the federal government on smoking-related illnesses. A federal judge has already dismissed two parts of the lawsuit. Under the remaining part, the government is trying to force the tobacco companies to give up ``ill-gotten'' profits that the suit asserts were obtained through fraud and deceit since the 1950s. Martin Feldman, a tobacco analyst at Salomon Smith Barney, said the tobacco companies are expected to listen to the proposals from the Justice Department team, but are highly unlikely to comment or commit themselves in any way. ``We see this meeting as little more than a get to know you session for the two sides,'' he said. Feldman predicted the tobacco companies ultimately will reject any notion of paying money damages and may reject the Justice Department proposals entirely. ``We doubt that the industry will embrace these settlement talks with any degree of enthusiasm,'' he said. The defendants are Philip Morris, R.J. Reynolds, British American Tobacco Plc's, Brown & Williamson Tobacco Corp., Loews Corp.'s, Lorillard Tobacco Co. Inc., Vector Group Ltd.'s, Liggett Group Inc., the Council for Tobacco Research U.S.A. Inc. and the Tobacco Institute Inc.

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