The report states that British American Tobacco, the world's second largest tobacco firm, is targeting around 750,000 young people annually through aggressive buzz marketing campaigns designed to encourage them to take up smoking.
BAT, which produces and markets Lucky Strike, has been criticised by Ash for endorsing youth-oriented products and culture worldwide in order to promote what it dubs a "school of cool" among young smokers.
Action on Smoking and Health said that BAT were using sponsorship of music festivals, sporting events, celebrity endorsements and viral marketing campaigns on youth-oriented social media sites such as YouTube and Flickr, to "recruit" around 750,000 young smokers each year worldwide.
Around 114,000 people die in the UK every year from smoking related illnesses.
Deborah Arnott, director of Action on Smoking and Health, said: "The days of using cartoon characters to sell to teenagers are long gone. BAT understands that if you want to sell to 14 year olds you have to act like you're aiming at 17 year olds. That is the heart of their whole school of cool approach."
The report claims many fashionable London bars had sponsorship deals with Lucky Strike, and that BAT has used ads on to promote Lucky Strike.
Globally, Ash said BAT holds youth-oriented parties and music events in Africa and South America, endorsed cricket teams in Asia, and commissioned contemporary artist Julian Opie to create BAT branded campaigns.
BAT has strongly denied suggestions it is targeting young smokers. Catherine Armstrong, said: "Children are not, and will never be, our audience."
BAT has a 15% share of the global cigarette market, and sells around 850bn cigarettes in 190 countries worldwide.
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