Nearly a quarter of a million more children will be brought up in absolute poverty in four years.
According to a report by the Institute for Fiscal Studies, an influential think-tank, the impact of the recession and the Government's austerity programme will result in 2.7 million families living below the poverty line by 2014 compared with 2.5 million today.
The projections are deeply embarrassing for the Coalition and in particular, Nick Clegg, who pledged to prioritise tackling inequality in Government.
Labour said the statistics – the first to suggest a rise in absolute poverty for 15 years – contradicted David Cameron's promise that there would be no increase in child poverty. The report found that between 2010 and 2014 average British incomes will stagnate.