In response to the rare public apology, both Philip Morris Cos. and R.J. Reynolds Tobacco Co. dropped their libel suits against ABC. Philip Morris had sought $10 billion in damages. Reynolds, which sued after Philip Morris, sought an unspecified award.

We now agree that we should not have reported that Philip Morris and Reynolds add significant amounts of nicotine from outside sources, the company said in a lengthy statement read by anchor Diane Sawyer on the evening news broadcast.

ABC agreed to read the statement during its Monday Night Football program Monday night and on Thursday’s Day One program, where the allegations were made.

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ABC also agreed to pay all attorneys’ fees, costs and out-of-pocket litigation expenses that Philip Morris incurred in connection with the lawsuit. Neither side would disclose the amount involved, but it could easily run into the millions of dollars.

The settlement of the bitter defamation suits comes at a crucial moment for the tobacco industry, as the Food and Drug Administration prepares to regulate tobacco products to curb smoking by minors. That move has sparked intense political controversy but has also been called the most important public health initiative of the Clinton administration by anti-tobacco advocates.

The revelations contained in internal industry documents and produced during congressional hearings last year have also given rise to a new wave of lawsuits against the tobacco industry.

Almost everyone with a stake in the tobacco debate offered an interpretation of the day’s events.

Since the beginning of the controversy, the two sides in the lawsuits appeared to be talking about very different broadcasts and it was no different Monday.

Philip Morris focused on allegations that the company artificially spikes or fortifies its cigarettes with nicotine.

Though the broadcast never stated directly that the companies add more nicotine than is present in natural tobacco leaf, the tobacco company contended loudly that it did not do so.

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Philip Morris claimed a major victory.

Members of the anti-smoking industry quickly jumped on the ‘spiking’ charge as a rallying cry in their crusade against tobacco, said Charles R. Wall, senior vice president and deputy general counsel of Philip Morris.

Now, it will be interesting to see if they too offer an apology or whether they pretend the issue never existed.

In an interview, Wall said that since the FDA regulatory push was based on in large measure the charges on the ‘Day One’ broadcast, then I think it will have an effectit should have an effectboth on the regulatory plan and on the mounting number of lawsuits against the industry.