The UK government has announced plans to introduce a surprise £520m levy on sugary drinks to tackle the country's burgeoning obesity problem.

Delivering his spring budget today, chancellor George Osborne said the average UK five-year-old consumes their own body weight in sugar every year and measures must be taken to prevent this.

"Doing the right thing for the next generation is what this government and this Budget is about," Osborne told MPs.

"No matter how difficult and how controversial it is. You cannot have a long-term plan for the country unless you have a long-term plan for our children's health care."

A sugar levy will be introduced on soft drinks from 2018, giving drinks companies – whose shares were sent tumbling by the news – time to adjust. The chancellor said there will be two bands for the levy – which drinks companies can choose whether to pass on to consumers – and added that pure fruit juices will be excluded.

Expected to raise £520m, the money will be used to double the amount spent on school sports. In addition, schools will be able to apply for money to extend the school day with more sports activities.

The announcement comes as a surprise as it was initially thought that the government preferred a product reformulation approach to direct tax on sugar products. The government's much-delayed Childhood Obesity Strategy had been expected to eschew a sugar levy until today's announcement.

The measure marks a major win for anti-sugar campaigners including celebrity chef Jamie Oliver, who have placed increasing pressure on the government to take decisive action.

We did it guys !!we did it !!! A sugar levy on sugary sweetened drinks ...... A profound move that will ripple around the world ....business can not come between our Kids health !! Our kids health comes first ..... Bold, brave , logical and supported by all the right people....now bring on the whole strategy soon to come ... Amazing news #jamieoliver

A photo posted by Jamie Oliver (@jamieoliver) on Mar 16, 2016 at 6:32am PDT

The news was welcomed by sports minister Tracey Crouch, who said on Twitter: "More money into school sport from a sugar tax will help get more children physically active & combat obesity. Very welcome across sector"

More money into school sport from a sugar tax will help get more children physically active & combat obesity. Very welcome across sector— Tracey Crouch (@tracey_crouch) March 16, 2016

Meanwhile, ukactive executive director Steven Ward said it was absolutely crucial that the extra funding is used to tackle the youth inactivity crisis and focus on ensuring that every child in the UK has the opportunity for an active start to life.

“Today’s announcement from the Chancellor of a near half-billion pound boost to children’s activity is a once in a lifetime opportunity to get more children active and we need to grasp it with both hands," he said.

"Whilst recognising the good work that is already happening in schools thanks to the School Sport Premium, this means going further than just getting children playing sport at school, by looking at building activity into in lessons, on the walk to school, on the weekend, during the holidays and at home. From pre-natal to post-natal, right up to college age, we have an opportunity to get this right, right now and this injection of resources is our chance to do that."

Public Health England had recommended a levy or tax in its previous evidence review on sugar reduction and the agency's chief executive Duncan Selbie said it was especially good that the money raised will be used to boost funding for school-based exercise and sport.

A sugary drinks levy is fabulous news for children and families in helping them to cut back on sugar," said Selbie.

"This will reduce the risks of obesity, tooth decay and other life threatening diseases. This is public health in action and a great foundation ahead of the child obesity strategy later this summer."