Food and drink companies have until 2007 to develop a more balanced approach to the promotion of products to children or face new legislation.
The government expects the industry to use the two-year stay of execution to voluntarily clean up its act, including changing the way it promotes healthier lines and funding positive health campaigns. It also wants it to address sponsorship, labelling, packaging and point of sale advertising, including vending machines in schools.
The government was persuaded not to introduce immediate legislation following the broadcasting regulator Ofcom's conclusion that a ban on TV advertising for 'junk' foods would be largely ineffective. Ofcom said that there was insufficient evidence on the effect that television advertising had on children's food choices.
It believed an outright TV advertising ban would be "ineffective and disproportionate"
However, the government said it would take action if the industry failed to put its house in order. Possible moves could include restrictions on advertising during prime-time children's TV and outlawing the use of cartoon characters, role models or celebrities to promote foods which should only be eaten occasionally as part of a balanced diet.
Digby Jones, director general of the Confederation of British Industry, urged the government not to blame food firms for people being unhealthy and said that legislation put companies "under attack from the advancing forces of the nanny state". He said: "Business has had enough of being used as society's scapegoat."
Alcoholic drinks firms have not been as fortunate as food firms. Under new legislation, from January 1 the advertising of alcoholic drinks must not appeal to people under 18 and must not imply daring, toughness or aggression.