Where there's smoke, there's fire--especially when it comes to the advertising battle for extra-low-tar cigarettes.

After a highly controversial investigation that covered the nation's top three cigarette manufacturers, the Federal Trade Commission unanimously concluded yesterday that Brown & Williamson Tobacco Corp. no longer can advertise its popoular low-tar Barclay as a "one-milligram-tar" cigarette.

Within minutes after the FTC made its announcement, Brown & Williamson filed suit in a federal court in Louisville, asking that the FTC be barred from taking action against Barclay advertistements pending a lawsuit. The stay was granted only minutes after the suit was filed.

Yesterday's skirmish was only the latest round in an increasingly bitter fight among cigarette companies to win the growing market in low-tar cigarettes.

The fight began a year ago when Brown & Williamson's chief competitors, R J. Reynolds and Philip Morris, charged that Barclay was not really a one-milligram-tar cigarette because Brown & Williamson had designed the cigarette in such a way to fool the FTC's cigarette-testing machine.

The agency has been testing cigarettes for more than 15 years for their tar and nicotine content and has been publishing these results for consumers annually.

After a year's study, the FTC decided that R.J. Reynolds and Philip Morris were correct. The chief way to reduce tar is to increase the amount of air that is mixed with the smoke. In most low-tar cigarettes, this is done by including a band of minute perforated holes in the filters. In Barclay cigarettes, however, the air travels into a smoker's mouth through four grooves in the filters. Pressure from the lips or hands blocks these filter grooves and increases the amount of tar to between 3 and 7 milligrams, the director of the FTC's Bureau of Consumer Protection, Timothy J. Muris, said yesterday.

However, because the FTC smoking machine does not apply this type of pressure to the cigarette, the machine measures only 1 milligram of tar.

As a result, the FTC said yesterday that Brown & Williamson no longer can rely on the FTC tests to substantiate its claims that Barclay is "99 percent tar free." Because no other tests substantiate that claim, Muris said the company will have to stop advertising Barclay as a one-milligram-tar cigarette.

What's more, because Kool Ultra and Kool Ultra 100s--just introduced this year--are designed like Barclay, there is a "significant likelihood" that similar advertising will be barred for these cigarettes, he said.

Although Brown & Williamson officials were unavailable, the company's lawsuit indicates that it opposes the FTC's action.

Meanwhile, Brown & Williamson is pressing the FTC to issue a complaint against its competitors, charging them with engaging in deceptive "bait-and-switch" advertisements, promoting low-tar cigarettes, but making them less available than high-tar cigarettes with the same brand name packaged in almost identical wrappings.