It cites obesity as one of the biggest threats to the nation's health along with smoking and insufficient exercise.
Coming shortly after ministers rejected plans for a 'fat tax' proposed by a government think-tank, the new report again raises the possibility of a tax on fatty foods as well as other measures such as subsidies for health foods which could help halt the 'unprecedented' rise in obesity in the UK. Over half of England's population is judged to be currently overweight or obese.
In children, overweight and obesity combined increased by over 25 per cent between 1995 and 2002. VAT on cholesterol could save up to 1,200 lives a year by reducing cake and junk food consumption, suggests the report.
Other investigations into the effect of diet on health, such as that published by the World Health Organisation last year, also propose subsidies for health foods but a tax of fatty foods, often much cheaper than healthier variants, has seen significant resistance from the food industry.
The new report confirms the growing view that government needs to take action to halt the rise in obesity.
"Individuals are primarily responsible for their own and their families' health, but the government has a major role in the process by providing the necessary framework for success. Activity is needed on a wide front to help individuals take greater responsibility," said Derek Wanless, charged with preparing the report.
The document - Securing Good Health For The Whole Population - sees an enhanced role for schools, local authorities and other public sector agencies, employers, and private and voluntary sector providers in developing opportunities for individuals to improve their health.
It makes more than 20 recommendations to government on implementing cost-effective approaches to improving population health, prevention, and reducing health inequalities consistent with the public health aspects of the 'fully engaged' scenario.