The ban, which would be phased in over four years, would affect offices, restaurants and any pub or bar that serves food — about 80 percent of England's drinking establishments.
The 20 percent of bars and pubs that serve no food would be free to restrict smoking if they chose, Health Secretary John Reid told the House of Commons.
"This is a sensible solution, I believe, which balances the protection of the majority with the personal freedom of the minority in England," Reid said, outlining the legislation he envisions. The proposal must be approved by Parliament.
Smokers and pub-goers were divided about the plan. One in four adult Britons smoke.
"I think it's good because smoking in pubs is probably why I started in the first place," said Tammy Foot, a student having a cigarette in central London.
Her friend, Kayligh Flynn, agreed. "This will probably help me quit," she said. "And you can always go outside, can't you?"
At the Lamb and Flag pub in the Covent Garden neighborhood, smoker Steven Thomas predicted many voters would be angry at the government.
"I think a lot of people are sick of the nanny state ... changing everything," he said.
The ban would apply only in England, which along with Scotland, Wales and Northern Ireland makes up Great Britain. Scotland's government announced last week that it would seek to ban smoking in all enclosed public places by 2006.
Ireland's implementation earlier this year of a ban on smoking in all enclosed workplaces helped bring the smoking issue to the forefront in Britain.
Reid said that as part of effort to further reduce the number of smokers in Britain, he wants "hard-hitting" picture warnings on cigarette packs and new restrictions on tobacco advertising.
He also promised to crack down on smuggling of tobacco products and on shops that sell cigarettes to minors, and to boost funding for National Health Service programs that help smokers to quit.
Reid said the smoking ban, if approved, would come into force gradually: in government departments in 2006, other workplaces in 2007 and affected pubs and bars by the end of 2008.
Andrew Lansley, the opposition Conservative Party spokesman on health, dismissed Reid's proposals as "gimmicks and a nanny state" and said they could prompt smokers to light up more frequently at home, endangering their children's health.
He said voluntary anti-smoking measures by restaurant and pub owners would have been more effective than a government ban.
"The government's approach simply risks delaying progress," he said.