An official health warning to peel or wash fruit and vegetables is set to be withdrawn because it clashes with plans to give free fruit to schoolchildren.

The advice to wash or peel produce was originally issued in 1997 by the then Chief Medical Officer, Kenneth Calman, as a "sensible precaution" because of fears that pesticide residues in some fruit and root vegetables could pose health risks, particularly for small children. The Ministry of Agriculture admitted that in rare cases, eating two apples with high levels of pesticides in them could have adverse effects.

But, to the dismay of Labour MPs and environment campaigners, health and environment ministers now argue that pesticide levels in groceries are under control because of tougher enforcement, testing and licensing, and therefore pose little risk to consumers. A leaked memo reveals that the Food Standards Agency (FSA) has urged the Advisory Committee on Pesticides (ACP) to agree that the advice should be withdrawn.

At risk is a new government initiative to give around two million children aged four to six a free piece of fruit every day by 2004. Pilot projects will be extended across the Midlands this summer, at a cost of £42m. The FSA claims that people will be confused by the two contradictory policies.

The ACP is expected next month to support an FSA statement that "fruit and vegetables do not have to be washed or peeled"

But Joan Ruddock, the Labour MP for Lewisham, Deptford, and Friends of the Earth claim the FSA is wrong, since official data still shows that 74 per cent of apples and 81 per cent of pears have residues, albeit at low levels. These chemicals include one which is restricted in the US because of health concerns for children. "There is still a long way to go before we can say there are no potential health effects," she said.

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