E-cigarettes use heat to vaporize a solution containing nicotine into an aerosol mist and are designed to replicate smoking behavior without the use of tobacco. Tobacco is the most significant cause of premature death in the European Union, responsible for almost 700,000 deaths every year, according to its own statistics.
Citi analysts said last May that they expect the sector will continue to see near 50 percent compound annual growth (CAG) over the next few years, depending on regulation and penetration into retail. Analyst Bonnie Herzog of Wells Fargo Securities predicted in August that sales in the U.S. last year would hit $1.7 billion, more than a doubling of 2012 sales.
(Read more: E-cigarette sales are smoking hot at $1.7 billion)
The advice from Davies will form part of an amendment to the Children and Families Bill this week, according to reports, but will not apply to Scotland, Northern Ireland and Wales, where healthcare policy has been devolved.
In December, a commercial court in France ruled that e-cigarettes qualified as tobacco products and should only be sold by registered tobacconists.
French news agency AFP said the court ordered an e-cigarette retailer to stop selling and advertising the products. It argued it was violating the "state monopoly on the sale of tobacco" which states that tobacco products can only be sold at registered outlets in France, where their advertising is also banned.
(Read More: Court ruling could deal blow to e-cigarette industry)
Meanwhile, European lawmakers rejected proposals in October that aimed to clamp down on how the latest gadget to help smokers give up tobacco should be sold. E-cigarettes would have been one step closer to being classed as a medical product across the Union and would have meant the product's availability to shoppers could have been be limited from 2014.
—By CNBC.com's Matt Clinch. Follow him on Twitter @mattclinch81