The report was carried out on behalf of the UK Food Standards Agency, in anticipation of the new European regulation on health and nutrition claims, Regulation (EC) No 1924/2006, which came into force in the UK from 1 July 2007.
The FSA will review the research and see whether it will help implement the EU regulation in the UK.
An FSA spokesperson did not rule out the possibility of other countries being able to use the data as well.
Under the new regulation, the European Food Safety Authority (EFSA) is responsible for reviewing and assessing claims on food products.
Review author EdComs looked at the existing literature across several English- speaking countries, including New Zealand, Canada, South Africa and the US, and considered a more than 150 existing reports on consumer understanding of food labelling.
While the new EC regulation differentiates between claims on the basis of three broad categories; nutrient claims, health claims and disease reduction claims, EdComs' review found that consumers do not differentiate between the types of claims on that basis.
The review said: " Health claims are the claim category which causes consumers the most confusion in terms of their interpretation and understanding of the claim.
The main reasons for this seem to be because it is a broader category than nutrition or disease reduction claims and in some countries they are less prevalent than nutrition claims. "
It found that once consumers are familiar with a nutrient-function relationship, such as calcium and bone health, a mere nutrient content claim can be interpreted as a health claim.
The group also found that the wording of claims can significantly alter perception and appeal, citing one example of consumers rejecting the health claim 'improves gastrointestinal health' because people did not like the term 'gastrointestinal.'
EdComs found that for nutritional claims consumers liked the use of short descriptions such as 'low', 'free', 'no added', and 'a good source of X'.
But while consumers found these terms easy to understand awareness about the definitions was poor.
For example, consumers were often not sure what the term 'low' meant and were likely to misinterpret '% fat free' claims.
The review found a UK study that indicated over half of respondents incorrectly thought that a product claiming to be '90% fat free' would be lower in fat than one claiming to be 'low fat.'
When it came down to health claims, the review found that the most important factor in how health claims are perceived is whether the consumer feels that the health relationship described is personally relevant to them.
Overall, consumers prefer short and simple claims and are less likely to be misled by them than longer claims.
As was the case for nutrition claims, the most important factor in how disease reduction claims are perceived is whether the consumer feels that they are personally at risk of the disease described.
Disease reduction claims relating to heart disease and cancer were rated as more relevant and influential than claims about less serious illnesses, EdComs found.
The review also concluded that consumers find health claims useful and are influenced by them, but at the same time remained sceptical of them as they were well aware that manufacturers will be trying to present their products in a favourable way.