A leading school catering contractor has said the Government's latest initiative to improve the eating habits of pupils could have serious financial consequences.

New nutritional standards announced by education secretary Alan Johnson will come into operation from September with a ban on sales of fizzy drinks, chocolate and crisps from vending machines and school tuck shops. Local education authorities and contractors have welcomed the new guidelines but acknowledge that, in the short term at least, the ban on popular sweets and confectionery could reduce the estimated £40m income from vending machines which is often used to subsidise or support school costs.