It has been estimated that 1m children will be obese in England by 2012.
Just one in nine parents of obese or overweight children believe their child has a weight problem, a poll suggests.
Health Secretary Alan Johnson said the government survey of nearly 1,200 parents showed many were in denial.
The findings were revealed as he unveiled the next steps being taken in the government's public health drive.
Some of the biggest names in the food industry, including Tesco, have signed up to the Change4Life campaign. The measures will be introduced in 2009.
The initiatives have been developed following the government's obesity strategy, which was published in January.
They have been designed to encourage a "lifestyle revolution" by getting people to exercise more, eat better and live more healthily.
Nearly a quarter of adults and a fifth of children are obese, according to the latest figures.
But the Department of Health survey of nearly 1,200 parents found only 11.5% recognised weight as an issue when their children were overweight or obese.
Parents were also found to underestimate how much unhealthy food they bought and used snacks as rewards, to appease conflict or relieve boredom.
Health Secretary Alan Johnson said: "The message that we received from parents was clear - we recognise that obesity is a big problem, but it's not our problem."
He said the solution was not "finger-wagging or lecturing" but being supportive and helpful.
He said that was why supermarket chains and manufacturers were being brought on board.
Tesco and Asda have signed up to offer promotions on healthy food, which could include cut-price fruit and vegetables.
And Kellogg's will be investing £100,000 in breakfast clubs and £240,000 in swimming programmes.
A group of over 30 leading companies led by the Advertising Association is promising they will provide £200m of free promotional activity over the next four years.
This will be kick-started by an advertising campaign featured on ITV early next year encouraging people to adopt healthy lifestyles.
Advertising Association chief executive Baroness Peta Buscombe said: "Businesses must be part of the solution to tackling obesity in the UK.
"By harnessing the immense talents in this country in advertising, marketing and media, we believe we can make a real difference and bring about real change."
Dr David Haslam, of the National Obesity Forum, said the involvement of big business was essential, but he added that he hoped firms were really involved rather than just in it for "a bit of publicity".
On the lack of recognition by parents, he said: "I think it is related to the fact that many children are overweight so when they look around their child does not seem to be.
"But without owning up to it there is no motivation to do anything about it."
The latest Change4Life announcement comes a day after the government unveiled the nine areas that are to share a £30m pot to become "healthy towns".