The Senate rejected a proposed $1.50-per-pack tax hike on cigarettes on Wednesday, deciding that a smaller increase of $1.10 was enough to discourage teen-agers from smoking.

The 58-40 vote was a setback for Sen. Edward M. Kennedy, D-Mass., and other liberals who said the larger increase was essential to save the lives of youngsters who might be tempted to start smoking.

But it was a key victory for Sen. John McCain, R-Ariz., and others trying to keep the sweeping tobacco measure from unraveling under the pressure of proposed changes from both ends of the political spectrum.