A German ban on smoking in indoor public places should be overturned for small bars, the country's highest court ruled today.

The Karlsruhe-based Federal Constitutional Court said small bars were at an unfair disadvantage due to the ban, rendering it in breach of the constitution. The measures came into effect in most of Germany's 16 states at the start of the year.

The ruling upheld a complaint lodged by the owners of two small bars in Berlin and a disco operator in the southwestern state of Baden-Wuerttemberg, who argued the anti-smoking legislation had put their business at risk.

Almost a third of the population smokes in Germany, where lighting up became a badge of freedom and tolerance after Hitler's Nazi regime cracked down on the habit in the 1930s.

An attempt by the federal government to introduce a nationwide ban failed in 2006, and many bars and restaurants in Berlin flouted the ban when it came into force in January.

Hans-Juergen Papier, the court's president, said the law would need to be redrawn by the end of 2009. Until then, smoking should be allowed in bars and restaurants of less than 75 square metres that lack a separate smokers' area, he said.

In the case of the disco, the court said the ban should be repealed for discos open only to adults.

As most of Germany's states have similar smoking laws to Berlin and Baden-Wuerttemberg, the ruling is likely to set a precedent for future complaints.