The Social Exclusion Unit, set up by Tony Blair to tackle the problems of Britain's underclass, paints a bleak picture of life in deprived areas that have become "no exit zones" for the forgotten residents and "no-go areas" for others.
Ministers believe many of the worst estates will have to be razed.
The report admits that previous attempts by the Government to improve the inner cities have failed to stem their decline, and says they have even made the problems worse. Money has been wasted on improving the physical appearance of the blackspots rather than helping local people.
Unveiling the report in London today, Mr Blair will promise to launch the most concerted attack yet against such deprivation. But he will concede that it will take 10 to 20 years to turn problem areas around.
An investigation by the unit found that in England alone there were "several thousand neighbourhoods and estates whose condition was critical, or soon could be".
A wide-ranging demolition programme will be the only option for "irretrievable" estates hit by a downward spiral of crime, drugs, empty homes and vandalism.
"There is no point going into the next century keeping estates that nobody wants to live in," Downing Street said. "Like a sinking ship, you have to save the people rather than the buildings."
But ministers will promise to allow local people to help to draw up local action plans, instead of "parachuting" in solutions from outside.
Mr Blair is adopting a high-risk strategy by promising to solve the problems, which have defeated previous administrations. Last night he said that successive governments had neglected the poor neighbourhoods for almost 30 years.
In an introduction, Mr Blair promises to bridge the widening gap between the poorest neighbourhoods and the rest of Britain. "I believe that it can be done. Indeed, if we are to bring Britain back together, it has to be done." Conditions on the worst estates were simply not acceptable; "It shames us as a nation."
The Prime Minister will promise that his ministers will publish by the end of next year the co-ordinated strategy. It will aim to defeat the causes of the crisis rather than "pick up the pieces". Mr Blair himself will oversee the work of 18 teams, each headed by a minister.Reuse content