"But there will be some community backlash if that right is taken away."
Smoking in most indoor areas was outlawed in 2004 by a bill sponsored by then-Rotorua MP Steve Chadwick.
Reactions to the proposal ranged from outrage to delight yesterday among members of Rotorua's hospitality industry.
Ruck and Maul duty manager Keith Mitchell said the bar would be "totally against" any new ban.
"Trade is hard enough without that happening," he said.
Hilary Hennessy, manager of Hennessy's Irish Bar on Tutanekai St, said a ban on smoking outside premises would be "just another nail in the coffin for the hospitality industry".
But over on Eat Streat, Atticus Finch co-owner Kay Thompson welcomed the news. As a non-smoker, Ms Thompson expressed a desire for an even wider ban.
"I think it's a filthy habit, and it costs the taxpayer so much money ... You are not allowed dogs in the inner city, so why not ban smoking?"
Since opening as a smoke-free venue last year, Atticus Finch had used roll-down blinds to prevent smoke from wafting into its outside area.
Ambrosia owner Kris Beehre took a more equivocal stance on a potential ban.
"It should be up to each restaurant," he said.
"I think enforcing it would be the hardest bit, and I think customers would be quite annoyed,"
Rotorua mayor Steve Chadwick said the remit was the next stage in the country's move towards being smokefree by 2025.
But she stressed that public-health policy was a slow-moving process.
"Every step is not without controversy," she said. "We are all just waiting for the next steps."
Mrs Chadwick acknowledged the potential for Rotorua Lakes Council to implement its own ban if central government decided against one, but declined to comment on how likely that would be.