The tiny island of Nauru in the Pacific is the world's smallest republic. It also holds the less celebrated honour of being home to the world's most obese people.

Nauruans were traditionally fishermen and farmers and endured long bouts of starvation brought on by drought. But in 1922 their luck changed. The island was discovered to be full of high-quality phosphate rock and a mining company made its residents extremely wealthy when it lavished them with royalties.

Their new-found wealth had a profound effect on the people - and their health. They turned to eating a high-sugar diet, bought cars and completely changed their lifestyles. Many hardly ever walked around the 20 km-square island.

Their wealth bought them luxury, but also had a profound effect on the size of their bodies: in one generation, they fell victim to an epidemic of obesity. The result was soaring rates of Type II diabetes, with two-thirds of those over the age of 35 affected by the disease.

The story of how a traditional fishing community was transformed into a medical disaster tells us about the future for Britain. The epidemic of obesity that has blighted the people of Nauru is the same affliction now threatening to undermine all the health gains made across Europe over the past 50 years.

The first group of teenagers with Type II diabetes in Britain was discovered in Leicester in 2000. There were 42 cases, all of them teenagers from Asian families, who bore a tell-tale black mark around the neck which can accompany the condition.

In 2001, there were 75 such cases, again British-born Asian children, who carried a genetic susceptibility to the condition that had never before been seen in teenagers. Then, in 2002, the first children from white families fell victim. Four children, three girls and a boy, aged between 13 and 15, were diagnosed with the disease in Bristol.

This year, the number of children given the diagnosis is likely to be well over 100. But it is probably far more common than that. Many children who are seriously overweight could harbour the condition, but instead appear lazy and rather sleepy to their parents. Unless they undergo a urine test, their intolerance to glucose will not be spotted.

Diabetes in children is the most worrying sign of what lies in store for the UK if the obesity epidemic is not tackled. One in five adults is now classified as obese; among children the figure is one in nine. The infectious diseases of yesteryear have disappeared thanks to better hygiene and vaccinations; the new threat is that through our own over-abundant supply of food, we could end up like America, where half the population is overweight.

Scientists talk about the 'Coca-colonisation' of the world to describe the international trend towards the high-fat, high-sugar diets that nearly destroyed Nauru. But, although there is more junk food, we are eating fewer calories than past generations. It is the lack of physical activity that makes it impossible to shed the pounds. Genetics, too, plays a significant part, and different ethnic groups may be more prone than others to being harmed by the modern diet.

Type II diabetes mellitus, also known as adult-onset diabetes, is a chronic, long-term condition with serious implications for later life. Patients have high levels of blood sugar because the body's cells don't respond effectively to insulin, the protein essential to making fat, proteins and glycogen from glucose and amino acids. As a result, sugar accumulates in the blood and the kidneys are forced to excrete it. It can be treated with drugs and with a weight loss programme, but if it isn't controlled, diabetes affects the eyes, the kidneys and the circulation to the legs, as well as causing heart disease.

Several studies have shown that it takes two decades to increase significantly rates of diabetes in emigrant populations which switch from having a traditional, vegetable-based diet to adopt ing a high-calorie, low-exercise lifestyle. Britain has a highly stable population, but has undergone great lifestyle changes in a single generation.

The question now is whether any of these changes can be reversed to help the next generation avoid a burden of disease that would have profound economic and social consequences.

Politicians find the issue impossibly taxing. Ministers are accustomed to dealing with epidemics of infectious diseases such as Sars, however scary they may be, but an epidemic such as obesity, caused by a mixture of genetics and lifestyle factors, is a different matter.

'What are we supposed to do? Ban all burger bars? Tell kids what they should spend their pocket money on?' groaned one government source. 'Everyone always talks about banning chocolate or forcing pupils to walk to school, but we're not in the business of telling people how to behave. What we have to do is offer people more freedom to choose healthier lifestyles.'

But last week there was a suggestion the Government might go much further. A policy document to go before the Labour Party conference this year suggests people who are overweight could be asked by their GP to sign a contract, pledging to try to eat healthily and go on a diet, in return for the appropriate NHS treatment. Although sources said the document had been 'over-hyped', there is no doubt Health Secretary Alan Milburn is looking for new ways to tackle the problem.

A plethora of cross-government initiatives aimed at curbing obesity include encouraging families to eat five portions of fruit and vegetables a day, asking supermarkets to set up shop on council estates, making it easier for people to walk to work, looking at the impact of food advertising on young children, and pilot schemes to encourage more sport in school.

Worthy as these initiatives are, none is significant enough to make dramatic inroads to obesity levels. Around 9 per cent of boys and 13 per cent of girls are classified as obese, a figure that went up fourfold between 1984 and 1994.

If the increases continue, thousands of children will develop diabetes within the next 15 years. Up to 10 million people could be diabetic by 2020. At the start of this century, the disease was virtually unknown, but now it affects three million people - double the number of a decade ago.

Although the couch-potato lifestyle is clearly related to obesity, there are genetic factors too that predispose certain races to type II diabetes. The 'thrifty gene' hypothesis suggests natural selection favoured those hunter-gatherers who were better at depositing fat and putting weight on quickly, because they would survive periods of starvation. The traditional hunter-gatherer lifestyle meant people alternating between times of feast and famine.

Now that we have supermarkets and an excess of food and we no longer walk 20 miles a day like our ancestors, these genes have become the enemy, not the friend. Anthropologist Jared Diamond, writing in Nature , highlighted the fact that the populations which until most recently had a tribal lifestyle are now most at risk from obesity, such as as the Nauruans and Aboriginal Australians. This may be because their relatively recent history is littered with examples of famine, which have meant those with the thrifty gene were more likely to survive and pass on their DNA.

Europe, on the other hand, has relied for centuries on agriculture, and appears to have a much lower genetic propensity to obesity and diabetes. But the interaction between genes and the environment is highly complex. Professor Peter Hindmarsh, paediatric endocrinologist at Great Ormond Street Hospital, London, believes children developing type II diabetes have a clear genetic propensity towards the disease, which is being triggered for the first time in puberty.

'Given that the gene pool has not changed to a huge degree over the last 20 to 30 years, there must be some event that has put a stress on the situation that is causing the disease to manifest itself early.'

That stress, he believes, is the combination of diet and lack of physical activity. He has begun to treat primary school children showing signs of glucose intolerance, often a precursor to full-blown diabetes, hoping the treatment will prevent them developing the disease.

But his view, like many others in the scientific community, is that the roots of obesity lie in the first year of life. There have been several studies showing that babies with a low birth weight, because of poor nutrition in the womb, are more at risk of becoming overweight. Evidence is growing that feeding babies properly in their first 12 months sends out the right hormonal signals and programmes the body's metabolism correctly.

Professor David Barker, a physician and epidemiologist at Southampton University, has shown that the nutrition the foetus receives in the womb will determine its chances later in life.

'We now know that it is children who are born small and thin but who gain weight rapidly who are most at risk, and those are the ones we should be monitoring,' he said. But he believes this won't work unless families revert to eating a proper three meals a day, and have far more physicial activity.

'I remember the number of overweight children I went to school with during the Forties. There were none,' said Barker. 'We are not going to return to some Arcadian world, but we're witnessing the rapid rise of an epidemic which has its roots in childhood - and we have to start treating it seriously.'