It's a simmering threat that has never quite receded.
Despite the success of the Advertising Standards Authority in regulating non-broadcast advertising over recent years, the role - and potential abuse - of advertising has never been more in the spotlight. The obesity and alcohol bandwagons have cast advertising as a villain and set the Government crawling once more over the industry.
So this is a potent time for the ad industry to take on the challenge of full self-regulation. Thirty years on from Callaghan's warning, the industry is finally putting the ad house in order. From next month, the ASA adds responsibility for regulating TV and radio advertising to its press, posters and DM remit.
With integration increasingly an advertising priority, a single policing system is long overdue. Consistency of regulation - or at least consistency in the sentiment of regulation - across different media is vital. Remember the Tetley debacle a couple of years ago? The company adopted a new positioning for its tea that included some health claims. The TV work was cleared by the BACC while the ASA upheld complaints that the same claims made on Tetley's poster ads were misleading. With more and more creative ideas expected to translate smoothly across media, such inconsistencies can no longer be brooked.
How the ASA handles this transition will be keenly observed, not least because the pressures on key markets such as food and alcohol have never weighed so heavy and the role of advertising in these product categories is poised on a blade of penal action.
Consumer pressure groups have a clamp-down on advertising in their sights and the issues can only get more heated in the run up to the next election. The Government has very clearly reserved the right to intervene if it decides advertising codes need to be tightened up. When Parliament approved the new system of regulation in July, the Government made it clear that the "ultimate power" for advertising control resided with the culture secretary, Tessa Jowell.
Not surprisingly, advertisers themselves are already seeking out some form of self-regulation as a pre-emptive defensive measure. This week, Scottish Courage announced plans to introduce warning labels, carrying a sensible drinking message, on their booze bottles. Diageo is considering following suit after experimenting with a similar message on some of its TV ads. Like the decidedly unappetising McDonald's posters featuring fruit and salads, this is another sign of how far advertisers are prepared to compromise their brand image to stave off punitive governmental measures.
Now the ASA must underline such individual advertiser actions with a responsible and swift-acting enforcement of the advertising codes, particularly as they relate to these most sensitive advertising issues of obesity and alcohol abuse. Its first real challenge will come later this autumn, when Ofcom announces its new code for alcohol advertising; the existing code has been regularly nose-thumbed and this cannot happen again.
Certainly the ASA can expect a tide of new complaints once its consumer-awareness campaign kicks in. If it can deal with these quickly, efficiently and sensibly the ad industry could emerge as a more transparent - trustworthy, even - business. And that's the real defence against any threats to advertising freedom.