The passage of a major U.S. tax bill on Monday containing a buyout for tobacco farmers has left a bitter taste among public health groups that had hoped to link the funding to new federal laws regulating cigarettes.

The groups, which have tried for years to build a “strange bedfellows” coalition with lawmakers from tobacco states to get rules on tobacco and nicotine use included with the buyout deal, must now look for a new legislative strategy.

“It’s a serious setback,” acknowledged Matt Myers, head of the Campaign for Tobacco Free Kids, said of the tobacco language contained in a massive corporate tax bill finally approved on Monday.

The health groups had hoped to get legislation granting the Food and Drug Administration power to regulate cigarettes and nicotine. The tobacco states would get a buyout to help farmers get out from under an antiquated price support system they say puts them at a disadvantage in the global market.

But House tax-writers, looking for a way to drum up support for the corporate tax bill, decided earlier this year to add a tobacco farm buyout as a “sweetener.” They did not include FDA language.

That approach didn’t fly in the Senate, which reshaped the buyout and strongly endorsed adding an FDA measure sponsored by Massachusetts Democrat Edward Kennedy and Ohio Republican Mike DeWine. Their bill would have allowed the FDA to regulate tobacco products as well as aspects of sales and advertising.

But in the House-Senate negotiations on the tax bill, the House prevailed.

A $10 billion buyout survived, the FDA language did not - and that means health groups will no longer be able to try to link the two issues to build a critical mass of support.

With that option closed, prospects for passage of FDA regulation in the near future may be dimmer now than in several years, several lawmakers and activists said.

“The only way we were ever going to get FDA (regulation) was with a tobacco buyout,” said Iowa Democrat Sen. Tom Harkin, who supported both a buyout and the health regulations.

“We are back to square one with regard to the brute strength of the tobacco lobby on Capitol Hill,” said Illinois Democrat Sen. Dick Durbin.

The Senate passed another FDA bill late on Sunday, but it is highly unlikely the House will take it up in its post-election “lame duck” session to finish spending bills.

The industry had split on FDA regulation. Altria Inc., the parent company of Marlboro maker Philip Morris backs it, while other key companies including Reynolds American Inc.‘s R.J. Reynolds Tobacco unit opposed it.

With the buyout route closed, health groups will try to link FDA language to other “must-pass” bills, Myers said, noting that the Senate is now firmly on record backing FDA regulation of tobacco, which takes 400,000 U.S. lives a year.

“The Senate vote this year demonstrated the breadth of support for the legislation,” Myers said. “Candidly, the challenge is to overcome the strong opposition of the conservative elements of the House leadership.”

A source at a tobacco company, who did not want to be identified, had a similar assessment.

“Kennedy can go to the floor and get FDA language through the Senate again, without the buyout. But he won’t get it through the House - not while (Majority Leader) Tom DeLay and the Republicans are in power. DeLay, a Texas Republican, has repeatedly stated his opposition to FDA tobacco regulation.