(FORTUNE Magazine) – Washington isn't the kind of town that likes to be told what to do. Its greatest recent failure was President Clinton's health care plan, which was handled by the White House as if it were the commandments from Sinai. Its model for success was the 1986 overhaul of the federal income tax that was initiated by then-Treasury Secretary Donald Regan with the following words: "This thing is written on a word processor. It can be changed." Almost nobody is betting that the $368.5 billion agreement to restructure the U.S. tobacco industry will go up in smoke; all sides have too much to gain for that. But if history is any guide, its details, announced with such hoopla last month, are merely a starting point and not the done deal.

That's bad news for Big Tobacco. As sure as the Marlboro Man is a cowboy, transforming the settlement into a statute will take longer, involve more changes, and probably cost more money than any of its framers imagined, particularly the tobacco companies. For the industry, the exercise is beginning to look like a very long session in a torture chamber from which it might not be able to escape. After all, who in official Washington is going to defend the makers of cancer sticks? So far, no one has. As a result, the agreement is shaping up more as a floor than a ceiling for industry concessions.

The basic accord is a simple trade: The tobacco companies get immunity from class-action lawsuits and a limit on damage claims in exchange for the biggest political payoff ever, the equivalent of a 75-cent-a-pack tax on cigarettes. But neither the U.S. government nor anti-tobacco activists will be satisfied with that. For the next several months, the cigarette makers and to a lesser extent the trial lawyers and even the do-gooder attorneys general who brokered the arrangement will discover that they have opened a massive can of worms, and that some of those critters bite. Here is a handicapping of the obstacles the settlement must overcome if it is to become the law of the land.

The fight begins at the White House. Without Clinton's approval the pact is dead, and that doesn't make the tobacco industry happy. The president is a devout tobacco-phobe and will demand that the companies give back some of the goodies they won at the bargaining table. Judging from Clinton's brain trust, the givebacks could be substantial; he will seek advice from the like of David Kessler, the former head of the Food and Drug Administration; C. Everett Koop, the former Surgeon General; and Senator Edward Kennedy, one of Congress' most vocal tobacco critics. It's already clear that Clinton will insist that the FDA be given more decisive and immediate authority to regulate nicotine. But that's just for openers. A panel of influential health advocates is pressing for all sorts of changes. Ever the politician, Clinton will hide behind the opinions of as many of these people as he can find. He probably will await the backing of at least Kessler and Koop before he feels comfortable enough to keep the process rolling.

Congress will want more. Lawmakers won't sit on the sidelines when an industry offers up billions they can spend. The attorneys general already secured a share of the loot for their states. Now the feds will bid for theirs. Anti-tobacco congressmen are angling to win extra aid for children's health programs, anticancer research, and antismoking programs overseas. But the largest additional expenditure will go to tobacco-producing states. Negotiators purposely left tobacco farmers out of the initial settlement, knowing that southern pols will need a good reason to vote for a plan that whacks an industry so dear to the folks back home. The omission provides tobacco-state lawmakers a chance to fight for--and thus take credit for getting--economic assistance for their farmers, which is an ample excuse to vote "Aye."

Republicans will try to undercut the trial lawyers. If the president blesses a revised package, the Republicans who run Congress will be loath to flatly say no. But they will change the deal where they can to benefit their friends and hurt their enemies. Ironically, Big Tobacco has lavished too much campaign cash on the GOP for party leaders to help the industry overtly. Smoke-filled rooms have never been more out of fashion, especially when black-hat tobacco lobbyists are lighting the cigars. But Republicans can still try to clip one of tobacco's chief adversaries: the trial lawyers, who also are among the Democratic Party's sweetest sugar daddies. Watch for the GOP to try to trim the estimated $3.5 billion that is slated to be the lawyers' take. And watch for the lawyers to claim that none of their fees will come from the settlement; they will be negotiated directly with the companies. Best of luck selling that one.

Don't expect a resolution soon. Wall Street analysts predict that the deal will be codified by year-end. Think again. "This [legislation] could be a year, two years, even three years away," Senator Orrin Hatch, chairman of the Senate Judiciary Committee, told FORTUNE. Most insiders assume the process will stretch well into next year, and they warn that the enterprise faces at least some threat of being stubbed out entirely. But can the companies walk away? The industry may have made itself into such a whipping boy that it has no choice but to obediently accept whatever abuse is meted out. In the meantime, every corner of the agreement will be scoured for flaws. The White House has launched a 30-day review from which dozens of problems are likely to surface. One already has: some economists doubt that raising prices and curbing advertisements will dampen cigarette sales as much as has been promised. Harsher actions and stiffer penalties may be called for.

Congress won't even begin to consider the pact seriously until the fall, and no one yet knows how the leaders intend to proceed. The best guess: It will be easier to list the committees that don't claim jurisdiction than to count the ones that do. Lawmakers are expected to examine everything, from the industry's request to have its payments declared tax deductible to an issue that has been delicately called the brother-in-law problem. Both the President and Senate Majority Leader Trent Lott have brothers-in-law who sat in on the settlement talks as trial lawyers, presenting both men with potential conflicts of interest. The one certainty about the coming tobacco wars is that they have only just begun.