The junk food ad ban intended to curb childhood obesity will affect only 1% of the £2.4bn spent annually on advertising food and drink, and may prove a “paper tiger”, ministers have been told.

The government has hailed the ban on advertising foods high in fat, salt and sugar before 9pm on TV and completely online, which came into force on 5 January, as a decisive and world-leading move that will remove 7.2bn calories from UK children’s diets every year.

But it has been delayed, watered down and narrowed in scope so much after food industry lobbying that it will be “mostly ineffective”, research by the innovation agency Nesta has found.

The policy has been weakened by so many gaps and loopholes that it will have much less impact than expected, it claims.

It estimates that the new advertising regulations cover only £190m, or 8%, of the £2.4bn annual spend. As firms respond to the TV and online ban, this is likely to fall to just £20m – barely 1% of overall advertising spend.

In particular, food producers will switch much of their advertising spend from pre-watershed TV and online, which are covered by the ban, to outdoor sites and advertisers’ own social media accounts, which are not.

The director of Nesta’s healthy life mission, John Barber, said: “This policy was first announced eight years ago and in that time there have been eight consultations and four delays.

“Partly due to pressure from the industry, these delays and adjustments mean that the restrictions intended to keep us healthy are operating at a fraction of their potential. This policy is at risk of being a paper tiger.”

Governments need to balance public health requirements with those of business, but the much-amended version of the restrictions “appear to strongly favour the latter”, he said.

Nesta said loopholes in the ban include it covering too few types of unhealthy food, ministers agreeing with the industry’s demand that brand advertising should still be allowed, and it not covering outdoor advertising such as billboards.

Exemptions ministers granted mean that foods generally considered unhealthy, such as chocolate spread and toffee-covered nuts, can still be advertised. More than 60% of consumer spending on products high in fat, salt or sugar are not covered by the ban.

Dr Kawther Hashem, a nutritionist and head of research and impact at Action on Sugar, said: “It is shocking that after nearly a decade of promises, eight consultations, four delays and constant lobbying, the UK could be left with unhealthy food advertising rules that affect as little as 1% of ad spend.

“While 1% of total ad spend is still a substantial amount in absolute terms, it falls far short of the bold action needed, and originally promised, to truly protect children from relentless unhealthy food marketing.”

Nesta’s findings follow a warning last week by Prof Chris Whitty, the chief medical officer for England, that certain industries – including food – have used “very strong lobbyists” to persuade successive UK governments not to adopt policies that would improve the population’s health.

Tactics such as portraying policies in the media as “nanny state” help to deter ministers from pushing through measures that are cheap, popular with the public and likely to prove effective, Whitty said in the Medical Journalists Association annual lecture.

He said this helped to explain why “we are so slow” in the UK to boost public health. The claim on a newspaper front page that a proposed new approach by ministers is “nanny state … kills off a lot of the things that we can move forward on”, he said.

The chief executive of the food campaign group Bite Back, D’Arcy Williams, said: “Junk food companies are as incredibly adept as they are sinister at finding loopholes [and] shifting their marketing into places where the rules don’t apply, while young people continue to be surrounded by unhealthy food advertising every day.”

A Department of Health and Social Care spokesperson said: “We’re delivering on our pledge to restrict junk food advertising and are already seeing change – with up to 7.2 billion calories set to be removed from UK children’s diets each year as a result.

“These restrictions are part of a wider package of action under our 10-year health plan, including limiting volume price promotions on less healthy foods and introducing mandatory reporting on healthy food sales.

“We’re committed to monitoring the impact of these measures and expect industry to continue to adapt.”