As a lesson in governance, threatening a legal business to pay now to avoid lawsuits by states in the future isn’t going to make it into the Proud Moments in American History textbook. Yet the proposed tobacco-industry settlement is evidence that the industry remains ready to deal to avoid a much worse fate: greater federal regulation of nicotine.

Congress should take up this cause again, and the state’s have every reason to hold off on their agreement until it does. The tobacco industry has been found in recent years to have lied about the dangers of smoking and about whether it marketed cigarettes to children. Then it was found to have lied about lying about it. It is vulnerable right now to lawsuits like it has never been before or is likely to be in the future. But the cash settlements that would come from these suits are not nearly as important as the regulation of nicotine.

The $206 billion plan — worth $1.4 billion to Maine — is the result of several years of work and several dead ends, most famously the McCain bill that failed in the Senate earlier this year. Though the dollar figure in the latest plan is lower than what the attorneys general started with in 1996, the amount going to states over the next 25 years is about the same, with the difference being that the federal government lost its cut.

Credit the state attorneys for getting something out of what looked like a dead deal. At the same time, don’t fret for the industry. Stock prices for the four major tobacco companies rose Monday on the news that the settlement was at hand.

Attorney General Andrew Ketterer has a difficult decision to make in choosing whether to accept the settlement for Maine. The deal contains several sections that can demonstrate their effectiveness only over time. For instance, will its provisions to end cartoon characters on advertisements, stop apparel giveaways and reduce brand-name sports sponsorship significantly reduce the targeting of children? Impossible to say. Mr. Ketterer, however, has other ways to judge the offer. More important is whether the settlement is enough to pay for the added health-care cost produced by smoking-induced illnesses.

After that, many of the decisions about the tobacco industry need to be made at the federal level. Congress failed once to put together a comprehensive reform of the industry, but came close enough to show it is possible. That won’t happen if the states surrender their rights to sue — without that pressure, the industry has no reason to be agreeable in Washington. And despite what politicians like to say, unless the industry cooperates Congress won’t act.

Regulating nicotine as the drug it is treats the tobacco industry fairly by properly identifying the product it sells. More than 35 years after the surgeon general’s warning was placed on cigarette packages, it would offer an honest message about tobacco. That’s more important than the settlement money.