The Government is retreating from its threat to impose a ban on junk-food commercials.
MPs, who have repeatedly threatened legislation, are now confident the food and drinks industry will toughen its voluntary code in a way that means a ban is not needed.
The climbdown will disappoint groups campaigning for tougher laws over the marketing of junk food to children.
One senior minister said: "The industry is taking the issue seriously. That is always what we wanted to see. An ad ban is the fall-back option but we don't think we will need it."
The change of heart came as the Food and Drink Federation issued proposals for a tougher code for broadcast ads, which says commercials should "avoid anything likely to encourage poor nutritional habits or an unhealthy lifestyle among children".
The industry agreed ads should not encourage children to buy excessive quantities or to consume a product only to obtain a promotional offer.
It also promised further curbs on the use of celebrity endorsement.
Food and drink companies have offered to back the Government's "healthy lifestyle" drive by including its messages on their products.
The proposals stop short of the 9pm watershed previously suggested by MPs, who also want the curbs to extend to press and posters. But they believe the proposals are a good basis for negotiation.
Gavin Neath, the president of the FDF, said its plans showed companies were taking a "responsible approach" to their ads and would bring public health benefits. "Our proposals involve not just money and resources, but also making packaging a medium to deliver government health messages," he said.
The industry has told the Government that adspend on food, fast food and soft drinks fell from £973 million in 1991 to £737 million in 2003.
- Comment, page 52.