The scheme was condemned by the Food Commission, which labelled the scheme "absurd and contradictory". It said the chocolate bar maker wanted children to get fat to get fit.
Tim Lobstein, Food Commission director, said: "The amounts of chocolate involved for these 'gifts' is quite astounding. It is ridiculous to combine a fitness campaign with eating chocolate."
The scheme is set to be launched next month under the name Get Active! and encompasses the Boost, Dairy Milk, Roses and Crunchie brands.
The promotional campaign is part of a corporate sponsorship deal with the Youth Sports Trust, designed to show that Cadbury is encouraging grassroots participation in sport at a time when the food industry comes under increasing attack.
As part of the scheme, for instance, in order to win the top item on offer, a set of volleyball net posts, a school need kids to eat their way through more than £2,000 worth of chocolate or the equivalent of 1.25m calories, 500 times the recommended daily calorie intake for an adult male.
According to the Food Commission, if schoolchildren purchase all of the 160m tokens that Cadbury's plan to issue, they would have to purchase nearly 2m kilograms of fat.
The commission estimates that a 10-year-old child consuming enough chocolate to earn a basketball through the Cadbury's scheme would need to play basketball for 90 hours to burn off the calories.
The Food Commission estimates that Cadbury hopes to sell over £67m worth of confectionery to school students as part of the Get Active! campaign.
Professor Phil James, chairman of the government's obesity taskforce, said: "This is a classic example of how the food and soft drink industry are failing to take on board that they are major contributors to obesity problems throughout the world."
However, despite the attacks, Cadbury is refusing to abandon the scheme and says that it does not encourage children to eat more chocolate. It argues that the scheme will substantially benefit schools and local communities.
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