Dairy companies have warned the Food Standards Agency it risks harming people's health if it takes an over-simplistic approach in its bid to cut saturated fat intake.

The agency is gearing up to finalise its strategy for cutting consumption of saturates, which are linked with heart disease. It says a reduction in average saturated fat intakes from the current level of 13.3% to the recommended 11% of food energy would save 3,500 lives a year and save the country £2.4bn.

It is expected to reveal plans for an advertising campaign to encourage people to cut consumption of saturates. It is also likely to ask manufacturers and retailers to agree to meet voluntary reformulation targets for products containing saturated fat.

But dairy companies fear their category will be particular hard hit by the drive. They have told the FSA that the saturated fat in milk-based products is not harmful - and scientific evidence even proves it can actually protect people against cardiovascular disease. The sector is also concerned at the prospect of a push to reformulate mainstream products when lower fat alternatives to most dairy foods are widely available.

One industry insider said any move to change the recipes of standard products without consumer knowledge would be "underhand" and "not helpful".

The FSA is expected to outline its approach to cutting consumption of saturates in January - later than expected. It has been sidetracked by a request from Alan Johnson, the health secretary, that it consider whether further action was needed to make food companies eliminate trans fats from their products.

This week the FSA board voted to continue with the current voluntary approach rather than recommending legislation. Changes to recipes made voluntarily meant trans fats now accounted for just 1% of average energy intake, it said, lower than the 2% maximum recommended by health experts. Government action was therefore not necessary, it said.

However, the FSA said it planned to lobby Brussels to make labelling of trans fat content mandatory.