British American Tobacco is returning to Burma a decade after campaigners forced the world's second-largest tobacco company by market share to leave the country due to BAT's links with the military regime.

BAT said it would spend about $50 million on a factory in Burma (also known as Myanmar) to produce its London brand of cigarettes after it left the country following an “exceptional” request from the British government to stop doing business there in 2003.

Tony Blair, the prime minister at the time, had criticised the group for working with the country's military dictatorship. This came after Ken Clarke, the Conservative frontbencher and former deputy chairman of BAT, admitted in a private letter that Burma's regime was "extremely unpleasant". Mr Clarke said campaigners had taken the quote out of context.

Nicandro Durante, the tobacco group's Brazilian chief executive, said: "We are truly excited with the post-sanctions development in Myanmar and are keen to play an active part in the country's economic and social advancement." BAT's move back into Burma comes as a steady stream of western companies, such as Norway's Telenor, are looking to do business in a state once shunned by the international community.

Mark Farmaner, director of the Burma Campaign UK, which heaped pressure on BAT to leave the country 10 years ago, said: "Companies can come [to Myanmar] in the right circumstances. They just need to avoid links with people who have dodgy human rights records. All the human rights problems that were under the previous government are still there today."

Not all companies are keen to win a slice of what some analysts predict will be a $300bn economy by 2030: Vodafone and China Mobile pulled out of the bidding for a telecoms licence in Burma in May after they realised an investment would not generate sufficient returns. – (Copyright The Financial Times Limited 2013)