In a surprise move, and one welcomed by health campaigners, Chancellor George Osborne announced a sugar tax on soft drinks companies in today's budget.
The levy is set to raise an estimated £520 million in its first year which will be spent on doubling funding for sport in primary schools.
ITV News consumer editor Chris Choi reports:
Announcing the levy, Osborne said that five-year-old children are consuming their bodyweight in sugar every year and that within a generation more than half of all boys and 70 per cent of girls could be overweight or obese.
He said: "I am not prepared to look back at my time here in this Parliament, doing this job and say to my children's generation 'I'm sorry. We knew there was a problem with sugary drinks. We knew it caused disease. But we ducked the difficult decisions and we did nothing'."
Health campaigners have welcomed the move describing it as "bold" and "brave".
Celebrity chef Jamie Oliver, a staunch campaigner for a sugar tax, said it was "amazing news" and a "profound move that will ripple around the world".
He added: "Business cannot come between our kids' health, our kids' health comes first."
Declaring that he was "so happy" following the announcement, he told ITV News the government had been "generous" in giving the drinks industry another two years to prepare for the changes.
He said all evidence pointed towards a tax on drinks being the most effective way to tackle consumption, being the single largest source of sugar intake in the diet of children and teenagers. Taxing all food was counterproductive by driving people towards fatty, salty foods instead, he added.
He also denied the tax would hit poorer people.
Other health campaigners have also spoken out to welcome the move.
Professor Graham MacGregor, chair of Action on Sugar said he was "delighted" that a sugar levy has been introduced but said it needed to go further.
How will companies be taxed?
Soft drink companies will be taxed on the volume of sugary drinks they import or produce
Drinks that have more than 5g of sugar per 100ml will be taxed.
There will be two levy bands, a high one for those products with 8g per 100ml or more and a lower band for those above 5g per 100ml.
The charge will equate to 18p per litre for the lower band and 24p per litre for the higher rate.
Pure fruit juices and milk-based products will be exempt from the tax.
When will the changes take place?
The government has said that the sugar tax will be introduced in 2018 giving companies enough time to modify their product mix and promote low sugar items.
Osborne said that companies would be consulted on the implementation of the tax and that the smallest producers, producing less than 6ml a year, will be "kept out of scope".
How will consumers be affected?
Soft drink companies are likely to pass on the cost of the levy onto customers.
The Chancellor said that if companies choose to do so, it would have an effect on public consumption.
What is the response from soft drinks companies?
The British Soft Drinks Association (BDSA) has slammed the government levy calling it "absurd" claiming that they are the only in the sector to have reduced sugar and calorie contents.
The Food and Drink Federation (FDF) called the move "a piece of political theatre".