Tessa Jowell, the culture secretary, wants ministers to consider a ban but the health secretary, John Reid, is opposing the idea, saying that such intervention would leave Labour open to the charge of creating a "nanny state".
Ofcom is expected to issue a tougher code for food ads this summer but ministers are discussing whether to go further by outlawing ads at peak viewing times for children in their drive to reduce obesity.
According to Whitehall sources, Reid has kicked the question of a ban into touch by setting up a consultation exercise on the "state of the nation's health", which will delay crucial decisions until a White Paper later this year.
The health secretary said the review would consider "how far it is the business of government to regulate the advertising of food and drink" and what contribution advertisers, the food industry and retailers could make.
Reid said: "We need a big debate about the relative roles of government, individuals and industries in tackling this challenge. We need to find the right balance, rejecting the nanny state and the Pontius Pilate state which washes its hands of its citizens' health."
The ad industry, which opposes a ban, will welcome Reid's approach. Andrew Brown, the director-general of the Advertising Association, took part in a public debate on food promotion and children staged by the Food Standards Agency last week. He was encouraged that there was relatively little pressure from the 500-strong audience for TV ads to be outlawed.
Although the FSA is considering calling for a ban, Brown said there was an acceptance the obesity issue had to be tackled on several fronts - including better education, ensuring children took exercise and involving their parents. "It is important that food and drink advertising becomes part of the solution rather than in the dock all the time," he said.
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