Ministers will stop short of imposing a "sugar tax" as part of a childhood obesity strategy being unveiled in the coming weeks.
Instead the Government is expected to use the threat of a levy in future to encourage the food industry to take action.
The move will frustrate campaigners such as celebrity chef Jamie Oliver, who insist that pushing up the prices of sugar-laden fizzy drinks and snacks is the best way to cut consumption.
Prime Minister David Cameron appeared to signal a change of heart on the issue last month when he suggested a specific tax could be needed to tackle the obesity "crisis" among young people.
The strategy will reportedly recommend that junk food adverts are banned from being screened near family programmes such as The X Factor and Britain's Got Talent - classified based on the percentage of under-18s in the audience.
Companies will be warned to reformulate products to reduce sugar content.
A feasibility study is likely to be launched to establish how a compulsory sugar tax could work if firms do not take adequate measures.
A Department of Health spokesman said: "Our childhood obesity strategy will look at everything, including sugar, that contributes to a child becoming overweight and obese. It will also set out what more can be done by all sides."