Branch chairman Eric Gray said, “Some small shop owners have said they will struggle to come up with the cash to make the necessary changes to their shop displays in addition to the potential loss of income from impulse buying of cigarettes and tobacco.

“We have had calls from some of our members locally saying it will cost around £2000 to change their displays. That is the hidden capital outlay which in some cases could tip some struggling small businesses over the edge.

“Two thousand pounds is nothing to the likes of Tesco, but to a small newsagent or corner shop, it could be the difference between their businesses being viable or having to close.”

“It’s very draconian and almost unnecessary. What they have to do is educate children not to smoke, not hide it under the counter, which could be counter-productive and encourage kids to have the forbidden fruit.”

Ministers want to ban tobacco displays in shops as part of a raft of measures aimed at cutting the health toll from smoking in Scotland.

The Tobacco and Primary Medical Services (Scotland) Bill is expected to complete its passage through the Scottish Parliament by the end of the year.

However, Mr Gray says the Federation now intends to lobby the Government to either get the regulations changed or for businesses to receive subsidies towards the cost of the changes.

“If the Government don’t do that, then some small corner shops will go out of business,” he warned.

David Forbes, Scottish president of the National Federation of Retail Newsagents and owner of Forbes Newsagents in Clepington Road, said, “My biggest point is that the MPs and MSPs who are bringing this in don’t listen to the people who know — that is us, the shopkeepers.

“I have CCTV in my shop and I could show them that no kids come into my shop and look at the cigarette displays. All they’re interested in is sweets, lemonade and comics.

“It’s crazy in many ways because my shop is right next door to a pub and the kids walk past and see people standing outside with fags hanging out their mouths because of the smoking ban.

“There’s also the security aspect of having to duck down under the counter to get cigarettes, which takes your attention away from customers. You could come back up and find somebody with a baseball bat in front of you.

“Some shopkeepers have been saying it will affect them and it will definitely be a huge inconvenience at the very least.”

Alan Mitchell, chief executive of Dundee and Angus Chamber of Commerce, said that, while the chamber had not been approached on the issue, any loss of income from cigarettes and tobacco would have an adverse effect on small businesses.

“Clearly it’s going to take some business away from small shops. There is a reasonable amount of impulse buying and it could affect some small shops more than others.”

The comments come as a national survey revealed today that more than three quarters of corner shopkeepers fear a ban on tobacco displays in shops could threaten their businesses.

Nine in 10 retailers feel the Government has not listened to their concerns about the display ban, according to the poll.

The survey was conducted for the Tobacco Retailers Alliance, which represents 26,000 UK shopkeepers and is funded by the Tobacco Manufacturers' Association.

Deborah Arnott, chief executive of Action on Smoking and Health said, “All this survey shows is that the Tobacco Retailers Alliance, a tobacco industry-funded body, has managed to frighten small shopkeepers into thinking that putting tobacco out of sight will kill their businesses.

“Yet again the tobacco industry is crying wolf, just as it did with smoke free legislation, which it said would destroy our pubs.”