Food Standard Agency to be abolished by health secretary

The Food Standards Agency is to be abolished by Andrew Lansley, the health secretary, it emerged last night, after the watchdog fought a running battle with industry over the introduction of colour-coded "traffic light"warnings for groceries, TV dinners and snacks.

The move has sparked accusations that the government has "caved in to big business".

As part of the changes Lansley will reassign the FSA's regulatory aspects – including safety and hygiene – to the Department for Environment, Food and Rural Affairs (Defra).

Its responsibilities for nutrition, diet and public health will be incorporated into the Department of Health.

"The functions of the FSA will be subsumed into the Department of Health and Defra,"a source told Reuters.

Last night the Department of Health would only confirm the FSA was "under review".

For the past four years the FSA, which was set up to protect consumers after the BSE crisis, has been at the centre of a regulatory battle that has pitted big food companies against consumer groups and public health professionals, with both sides accusing each other of misinformation campaigns and excessive lobbying.

The FSA has led calls for the Europe-wide introduction of a traffic light system that required food companies to label the front of their products with red, amber or green symbols to denote the amounts of fat, saturated fat, salt and sugar contained per serving.

The agency, which employs 2,000 staff and spends £135m a year, said this was the best way to allow Europe's increasingly obese shoppers to make informed decisions about the food they bought.

But traffic light labelling was buried by the European parliament last month, when MEPs backed a rival system favoured by multinationals such as Nestlé, Kraft and Danone. The industry advocated "guideline daily amounts", a system that listed percentages of recommended daily allowances included in each serving.