Britain is facing an epidemic of diabetes among children and teenagers within a decade because of soaring rates of obesity and lack of exercise.

Medical experts warned yesterday that poor nutrition in the first few years of life, low levels of physical activity and genetic factors are combining to leave a generation with unprecedented health problems.

If left unchecked, they predict that the cost of obesity-related diabetes care will swallow up the extra billions of pounds earmarked by the Chancellor for the NHS. There are currently around 100 teenagers with the condition, but this is predicted to rise tenfold within the next seven years. By 2020, thousands of teenagers are expected to have the condition, which can lead to damaged arteries and eyesight.

Last year, the first white teenagers in Britain were diagnosed with Type II diabetes, previously only seen in adults and teenagers from Asian families where there was a genetic predisposition to the disease. There are now younger children showing signs of glucose intolerance, often a precursor to diabetes, who are being treated by specialists in London.

The Type II condition develops when the body can still make some of the hormone insulin but not enough, or when the insulin that is produced does not work properly (known as insulin resistance). Insulin helps the cells take in fuel in the form of blood sugar, but if the glucose doesn't reach the cells it builds up in the bloodstream, causing damage to the blood vessels and organs.

This type of diabetes, sometimes known as adult-onset diabetes, usually appears in people over the age of 40, and can be treated by diet and exercise or through tablets, but there can be complications.

Around one in five adults in Britain is now overweight, and 9 per cent of boys and 13 per cent of girls between the ages of five and 16 are classified as obese. Although children are consuming fewer calories than in previous generations, the food is higher in fat, salt and sugar and they are not exercising enough.

Dr Tom Smith, a GP who is an expert in diabetes, said: 'Diabetes is one of the leading causes of premature death in the UK. Unless we wake up to the problems caused by obesity, we're going to see soaring rates of this condition. Schools should be looking at providing 10 hours of exercise a week. At the moment there are schools which aren't even offering one-fifth of that.'

The Government has pledged to try to reduce obesity rates, by setting up initiatives across Britain to encourage people to adopt a healthier lifestyle. Sir Steve Redgrave, the rower who was diagnosed with the condition before the 2000 Sydney Olympics, is fronting a campaign starting this week to find those who may unknowingly have impaired glucose intolerance.

And at a conference today doctors will highlight how the roots of obesity are laid down in the womb and childhood.