The Foods Standards Agency has set aside up to half a million pounds to pay for a study into the effectiveness of front-of-pack nutritional labelling - in a sign that it will be one of the biggest research projects of its kind.

The study will focus on consumers' understanding of three kinds of signpost label - the FSA's own multiple traffic-light based scheme, the Guideline Daily Amounts favoured by Tesco and a hybrid of the two.

It will also assess which approach is most effective in influencing consumers' shopping and eating habits.

Consumers will be tested on their ability to use signpost labelling to interpret levels of nutrients in products correctly.

Another part of the study's remit is to examine whether consumers use signpost labelling differently across categories of foods and at different meal occasions.

The influence of advertising of schemes will be taken into account, as will competing messages on packs, such as those indicating special offers and low fat claims.

The budget for the study suggests thousands of consumers will be surveyed, through face-to-face and telephone interviews, focus groups and accompanied shopping trips.

The actual form of the research remains undecided. The FSA has asked shortlisted research companies bidding for the work to devise their own approaches. They will pitch towards the end of September.

The successful bidder will be told to complete the project within a year of contract agreement - though they will be under pressureto complete it sooner.