"B-Daman warriors. Rapid fire! Serious Accuracy! Awesome firepower! Be da man - with B-Daman!" "My scene goes Hollywood. It's so hot - and so are we!" "Get new Sticker-mania. It's amazingly cool!"

If you have trouble recognising those product names, or even understanding the words, don't worry. They're not meant for you. They are, instead, examples of an industry worth at least £70m every year: advertising aimed directly at children. The value of indirect marketing - ads that are not made expressly for kids but are seen by them anyway - runs into the hundreds of millions. The result is that today's average British child is familiar with up to 400 brand names by the time they reach the age of 10. Researchers report that our children are more likely to recognise Ronald McDonald and the Nike swoosh than Jesus. One study found that 69% of all three-year-olds could identify the McDonald's golden arches - while half of all four-year-olds did not know their own name.

Parents have fretted about this for years. They know what it is to battle in the supermarket aisles with children professionally trained in the art of pester power. Those on low incomes are hit especially hard, nagged by kids desperate for gadgets or clothes they have seen on TV but which their parents cannot afford. The NHS reports rising incidence of mental illness among the young, with anxiety and depression linked to the pressure to buy, to own, to consume. The data shows today's children are unhappier than any generation of the postwar era.

Watch commercial television at teatime and you'll soon be bombarded by ads for burgers, ice-creams, chocolate or brightly-coloured water. The ads move fast, with plenty of whooshing and whizzing, and often with an inducement outside the food itself: a link to a big current movie or a range of free plastic toys. And schools are no longer a refuge from this commercial onslaught, but one of its key battlegrounds. There are poster sites promoting new films by the assembly hall. Until education secretary Ruth Kelly banned them last month, school vending machines were a prime outlet of crisps, chocolates and fizzy drinks.

Parents of sick kids have reported McDonald's workers targeting children's wards of hospitals, handing out balloons and toys, but also leaflets promoting their own product. Others have noticed the food giants finding new ways to sell their wares, bypassing TV to reach directly into children's lives. The campaign group the Food Commission has singled out a Cheerios counting book that encourages toddlers to put cereal pieces in the slots on the page and Nestlé's offer of a customised story, featuring your child's name printed in a Milkybar Kid adventure. Advertisers love the idea of breaking into what psychologists call "the educable moment" - that precious second when a child is reading or playing and so at their most receptive.

Meanwhile, childhood obesity has tripled in the past 25 years. Nearly one in six British kids is overweight; 6% are obese. For the first time, children are being diagnosed with type 2 diabetes, a disease previously thought to be confined to the over-40s. Last year, the government floated a possible ban on the TV advertising of junk food - so-called "HFSS foods", or products high in fat, salt or sugar - before the 9pm watershed. The proposal was dropped just before the election.

But the question has not gone away. On the contrary, consumer activists predict that the promotion of unhealthy food to kids, and the wider issue of marketing to children altogether, could soon become a national cause célèbre. Where Jamie Oliver led on school dinners, campaigners against junk food on TV could soon follow. Others anticipate a larger movement, one that makes the business of selling to kids as controversial - and unpopular - as the selling of tobacco. They point to the survey by the National Family and Parenting Institute which found that no fewer than 84% of parents believe there is too much marketing aimed at children. Are they right? And if the danger is real, what can be done about it?

"Smartie people are happy people." "A finger of fudge is just enough to give your kids a treat." "If you like a lot of chocolate on your biscuit, join our club."

That took no research at all. I typed those three jingles from memory, even though I can't have heard them for 25 years. That says two useful things. First, that adverts really do have an impact on the juvenile brain, one that can last for decades. Second, that using TV to persuade kids to buy things, including sweets, is not new.

The inducements that stir such controversy now are hardly new either. I remember shaking the morning box of Shreddies or Frosties for the toy within. I remember pestering my mother to buy Sugar Puffs until I had amassed enough tokens to receive my "free" Honey Monster soft toy. He's still there in my parents' house; now my own sons occasionally give him a cuddle.

In my memory, the ads of those days seem gentler. Memory can play those tricks, so I arranged to view a few of the old adverts, to see how they looked in 2005. The magician David Nixon appearing to conjure Lyons Maid lollies from nowhere; kids dressed as explorers stumbling across Cadbury's chocolate animals in a jungle that consisted of a few house plants.

Of course, the ads were less slick then, but they were still playing the same game: promising fun and adventure if you ate more sweets. No, the difference between then and now lies somewhere else: in the sheer volume of advertising that rains down on today's child.

In my childhood, you saw ads on ITV and nowhere else. Now there is a profusion of cable channels, including half a dozen or more aimed at kids; crucially, there's also the internet, email and mobile phones. Advertisers have found ways to use all three, from dedicated websites to viral email campaigns to unsolicited text messaging. Bluetooth technology enables shops to send an ad to your phone the instant you walk past. Even computer games are not immune, with products surreptitiously embedded within.

There is, in other words, an enormous children's marketplace, and it is lucrative terrain. The under-16s spend an estimated £30bn a year, including £6bn on clothes and £2bn on toys. Eight in 10 kids have their own TV in their room; half have a DVD player or a video. A million children under nine own a mobile phone. One in five have internet access. With more pocket money than ever before - over £6 a week for the seven to 11 age group and more than £9 for the under-16s - they are a highly-prized target audience. And make no mistake, they are being targeted.

"Ninja Storm, Ice-Cream Form! Power of ice-cream! Power of sugar-coated chocolate beans! Power of milk chocolate! Power Rangers Ninja Storm! The ice-cream of super heroes!" "I'm lovin' it!" "Pepsi: Dare for More."

Food is the battleground. Analysts are now so clear on what foods are unhealthy for children that they even have a snappy name for them. They are the Big Five: sweets and chocolate, soft drinks, crisps and savoury snacks, fast food, and pre-sugared breakfast cereals. (Throw in pre-prepared ready meals and you have the Big Six.)

Now, which foods are advertised when kids watch TV? As it happens, food spending on TV ads is in overall decline, but in 2003 the industry still managed to shell out £522m, on promoting food, soft drinks or chain restaurants on television. According to an Ofcom report, Childhood Obesity - Food Advertising in Context, the products to get the biggest push were convenience food, confectionary or dairy products, the very categories that feature most prominently in the diets of obese children.

And it is these which appear most frequently during those traditional, after-school hours known as "children's airtime". Of all the food adverts that are on then, 77% are for Big Five products.

That might seem to suggest a simple solution: ban all TV advertising of junk food during those kids' hours. The trouble is, that's not the only or even the main time children watch TV. Britain's under-16s now watch around 17 hours of television each week, but 12 of those hours are outside the traditional zone. The programme most watched by British kids is not Blue Peter or even ITV1's My Parents are Aliens but Coronation Street. In other words, you could weed out the junk ads from the 22 minutes a day that kids spend watching commercial children's TV, but that would do nothing about the other two hours they spend in front of the box, usually between 6pm and 9pm.

The marketing of food to young consumers is not only a matter of when, but how. The techniques are tried, tested and familiar. An old favourite is the cartoon character, the likes of Tony the Tiger, still doing gr-r-r-reat service for Frosties, or McDonald's YumChums. The appeal to young children is obvious: bright, primary colours; friendly, elastic faces. Except these lovable creations are not there to amuse or entertain but to sell.

A more visible method is the tie-in to a big, blockbuster movie or the celebrity endorsement (a staple of adult-oriented advertising too.) It could be David Beckham selling Pepsi or Venus Williams promoting Big Macs ("McDonald's and the Williams sisters make a perfect team!" says Venus's website), but the logic is the same: healthy person selling unhealthy product. The exemplar is Gary Lineker's campaign for Walkers Crisps, which advertisers credit with the sale of 114m extra packets in just two years.

There are subtler strategies too. The food itself can be designed to appeal to a child's sense of fun, with items to unfold or unwind like Kellogg's Fruit Winders, or to dip like Dairylea Dunkers, or to assemble like Dairylea Lunchables. Researchers have found that children barely able to speak will still communicate a preference for certain brands, associating heavily advertised branded foods with fun. One mother of an obese five-year old from the north of England told Ofcom's research team that her kids wouldn't eat "normal shop spaghetti", but tucked in once they saw Bob the Builder on the tin.

That's an outcome the marketeers work hard to achieve. Two years ago a committee of MPs unearthed an internal document from Walkers Crisps, the brief for the contract to advertise Wotsits. The aim: to make children believe that "Wotsits are for me. I am going to ... pester mum for them when she next goes shopping." The Guardian's Felicity Lawrence found that the admen for Fruit Winders, which are one-third sugar and a past winner of a Tooth Rot award from the Food Commission, had boasted that their campaign had "entered the world of kids in a way never done before" and managed to "not let mum in on the act". By using a kind of coded language, the ads had set up a conspiratorial relationship between the brand and the child, with the parents on the outside. Kellogg's was caught again when it placed a recruitment ad for a senior researcher in its "kids brands" division: "You will spend your time understanding kids, finding out what interests them ... and appreciating the realm of pester power."

The advertisers defend themselves vigorously. First, they say they've changed. Not only do they spend less than they once did, but the content of their ads has changed too. There is some truth to this. Visit the Kids Zone of the McDonald's website and you'll think you've stumbled across an old public information film. Ronald McDonald is bounding around a gym, extolling the virtues of exercise. Meanwhile, his animated pals sing this happy ditty:

Don't let your YumChums get glum

Put healthy stuff in your tum

Think about the things you eat

Don't give us toooo many treats!

Run about, jump around and play

And you'll feel yummy every day.

And not a quarterpounder to be seen.

For some, this is corporate social responsibility made real: McDonald's emphasising that its product is a "treat", only to be eaten in moderation as part of a balanced diet. For others, it's an empty gesture. Sure, you can promote McDonald's as if it's a vegan spa, but once the kids are through the doors they're going to be gulping down those fries. It's reverse, sleight-of-hand advertising: you get all the credit for exalting virtue, when really you're still selling sin.

Some advertisers refuse to see any case to answer. They deny a link between junk food ads and young people's eating habits, still less between ads and obesity. Academic research, concluded Ofcom, showed only "modest direct effects" of ads on food consumption. Yes, it is true that the more time a child spends in front of the box, the likelier it is that he or she will have a bad diet, bad health and even be obese - but that could be because watching TV is itself a sedentary activity. Or that TV viewing tends to go hand-in-hand with constant fridge-opening and snacking. Or, maybe, that the child will see more ads for those Big Five products. But who can disentangle one factor from another?

Besides, there are so many other explanations for why today's children are getting fatter. As the culture secretary Tessa Jowell told me: "The problem is not the number of calories kids are taking in, but the fact they are doing less to burn them off: they're less active."

That message finds an ally in Greg Rowland, whose Semiotics for Brands business has established him as the thinking man's adman. He has worked for a variety of products, including KFC, Cadbury's Fingers and Smarties.

He rattles off the possible causes for the surge in childhood obesity. The selling off of playing fields; the decline in kids walking to school; the fear parents have of letting their children play unsupervised in the park; the disappearance of the old-fashioned park-keeper; the breakdown of community; the rise of the two-working-parents household, leaving less time to prepare wholesome meals. "There are so many issues which can be blamed for this problem," he says. "Why single out TV advertising? Because it's an easy target."

What about advertisers' deliberate manipulation, encouraging, for example pester power? "The real question," says Rowland, "is why are parents not strong enough to say no? It's because they feel guilty. Giving in and buying stuff is the easy way of parenting for 'time-poor' parents."

But surely the kids would not be nagging at all, if the advertisers hadn't planted the desire in the first place? No, says Rowland. "The one thing advertising cannot do is create desire." Its skill is in making us choose Persil over Ariel - not in persuading us we need soap powder if we don't. "Advertising doesn't create a desire for sweet things, that's biological. Kids will always want crisps. Remember, Billy Bunter was not heavily advertised to."

And yet, Billy Bunter was a memorable creation because he was so unusual: these days every class has a couple of Bunters. In some parts of the country, they have many more. Advertising cannot shake off all responsibility for that, can it? One 2004 study found that TV ads seem to engage obese children in a more emotional way than they do children of normal weight: they connect with them, making them buy and consume more.

Even that very temperate Ofcom report admits that TV might have an indirect effect on children, one almost impossible to measure. It cites peer group pressure or the views of parents. Think of the Scottish mother who told researchers that "People might put Sainsbury's or Tesco's own crisps in the child's lunchbox and [other] children will make fun of them because they haven't got Walkers or McCoys." She knew what the other kids would say: "Your mum can't afford" the brand names. Surely that is the advertising effect Rowland was speaking of - not creating an appetite for crisps, perhaps, but adding to the pressure to have this brand, rather than that. Are we certain that doesn't extend to the choice between healthy and unhealthy food? Take the child who has no crisps in his lunchbox, but a carrot and an apple instead. Are we sure he wouldn't be teased? And if he would, might not the geniuses in adland bear some of the blame?

Click. "Hello Moto." Click. "The future's bright." Click. "iPod nano. Impossibly small."

It's not just food. Children are being targeted to buy everything from music downloads to shoes, mobile phones to jeans. Few places, it seems, are off limits. This summer it emerged that Boomerang Media, which already offers advertising space in more than 1,000 secondary schools, now promise access to toddlers' play areas, on place mats and lunchboxes. Its Play House Media campaign tells would-be clients it can turn children's parties into a "communication opportunity" and a "brand experience for kids".

Some are not too troubled by that. For one thing, young people tell pollsters they like adverts - especially if they are funny or have good music. More importantly, kids are savvy. The evidence shows that the under-fives regard ads simply as entertainment. As they reach seven they start to tell the difference between ads and programmes. By eight, most can see that adverts are trying to persuade them of something; once they're 11 or 12, they can give a pretty shrewd critique of what advertisers are up to.

Greg Rowland believes all this is a crucial part of a child's education, equipping them to be discerning consumers in later life. And British ads give a special kind of training. While the Italians, say, might be direct - "Buy these biscuits and you'll get more mates" - Rowland says British ads are wittier, more playful. Those playground catchphrases, from Tango to Michael Winner's "Calm down, dear", give an early introduction to irony, metaphor and wordplay. "Our children may be more cynical, but they have more wit, more creativity than others," he says.

Such a rosy view is not universal. In Shopping Generation, a ground-breaking study published earlier this year, the National Consumer Council established that young people enjoy shopping, that they have more money in their pockets and greater influence over the choices their families make than ever before. They are highly "brand-aware", more even than their counterparts in the land of materialism, the United States.

But they pay a price. They record higher levels of dissatisfaction than American kids, wishing that they or their parents had more money to spend, sensing that too many goods were out of reach. According to the report, "they are relentlessly targeted by companies and advertisers, operating on occasion with the ethics of the playground bully. Their vulnerabilities are sold back to them through magazines and marketing."

Especially hit were the youngest - 84% of 10- to 12-year-olds said they cared a lot about "games and stuff" - and the poorest. It was the children in socioeconomic groups C2 and DE who were most aware of branding. All the kids surveyed liked clothes with recognisable labels, but that was truest among those who could least afford them. "I feel depressed when I can't get it," said one boy of the items he can see but cannot pay for. Not wearing the correct gear can lead to embarrassment, if not bullying, says the report. To spare their kids that ordeal, poor parents buy expensive trainers with money they haven't got. "This is poverty twisting the knife," says the NCC.

Girls, it seems, are especially badly affected: 71% of seven-year-old girls say they want to be slimmer. But the commercial overload piling down on our children is hard for all of them to bear.

Juliet Schor, a US researcher, pulls no punches. "High consumer involvement is a significant cause of depression, anxiety, low self-esteem and psychosomatic complaints," she writes. "Psychologically healthy children will be made worse off if they become enmeshed in the culture of getting and spending." The British figures, which show a rise in mental-health problems among the young that parallels the intensification of juvenile consumerism, suggest she is on to something.

Compared with 1974, today's 15-year-olds are more than twice as likely to have behavioural problems and 70% more likely to suffer emotional troubles such as anxiety and depression. One in 10 kids between 11 and 15 has a clinically recognised mental disorder. Incidence of self-harming and youth suicide are dramatically on the rise.

Is this down to a few corporations and their fiendishly clever advertisements? Of course not. But it may be the fruit of a culture that, on every measure, is more focused on the commercial, on the material, than ever before.

When Jamie Oliver uncovered the dire state of school meals, the solution seemed obvious: serve better food. But what is the answer to this wider problem, the consumerism that might be drowning our children? Polling shows that 57% approve of a ban on TV advertising of, for example, junk food during children's programmes, with nearly as much support for a ban on all ads that sell HFSS foods to kids using cartoon characters or celebrities. (So no more Gary Lineker before 6pm). Ed Mayo, director of the National Consumer Council and author of Shopping Generation, backs the move. He knows it won't deal with the entire problem, since kids watch more TV after six. "But you have to start with it," he says.

Tessa Jowell reckons that would be a "grand gesture" but would miss the root of the problem. Advertisers would simply scurry away from TV and pitch up on billboards or the internet. (Mayo has a solution for that; he wants to see a clampdown on the 'bandit country' of the internet, where purveyors of HFSS products try to forge a much more intimate relationship with kids.)

"We've got to look not just at the promotion but at the foods themselves," Jowell says, adding candidly, "Better than banning advertising is bringing pressure to bear on the industry to stop selling these ghastly products." Does that mean a ban on certain foods? No, that would only make them "disproportionately delicious". But it might mean more of the self-restraint that made some supermarkets shift sweets away from the cash tills, replacing them with healthier offerings.

Chris Graham, head of the Advertising Standards Authority, also opposes any blanket move. He prefers to enforce existing rules on individual ads, rooting out, for example, any incitement to pester power or false associations of junk food with fitness and health. (McDonald's fries and Frosties have both felt the ASA's wrath recently.) As for text messages and emails, "If you haven't opted in to these communications, you shouldn't get them."

But ads themselves, properly regulated, are no bad thing. Like Rowland, Graham believes they are part of growing up. And if you shielded kids's eyes from them, when would you take the blinkers off? At 16? At 12? "I don't think you can insulate children from the commercial world in which we all live." Besides, bans don't necessarily work. There are no ads on children's television in Sweden and yet their kids are as overweight as ours. Quebec made the same move, and yet has the same juvenile weight problem as the rest of Canada. Graham also fears for what a ban on adverts would do to children's programming in the UK, depriving commercial television of funds. The BBC would become the sole player and, free of competition, quality would deteriorate.

None of that fazes Mayo. Perhaps, he says, we could all agree on an age below which it would be deemed unethical to market goods. "Is it six months?" he asks. "Is it age two, age six, age 11? We should decide."

Others wonder if the best option is counter-propaganda, fighting fire with fire. The ever-tighter bans on cigarette advertising did not cause a fall in smoking: that only happened when there was a positive campaign, using advertising, urging people to give up. Perhaps the same is needed for healthy eating, maybe even for anti-consumerism itself.

Rowland says poor kids will stop wanting Nike trainers only when they have another way to prove their own worth, another way to show they are valued. In other words, when society itself is changed. It raises a tricky question. Can we really protect children from consumerism run wild without changing the way the rest of us live? Is this a problem of the young - or a problem for all of us?