London is now fastest-growing city in Europe. But can it cope?

New report reveals incredible expansion of congested capital - with thousands more arriving each month

London used to be known as the Great Wen, meaning the tumour on the face of England, the pestiferous, polluted, insanitary, seething mass of humanity and industry that was the capital, a place from which anyone with any sense would flee without a second thought.

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There is no recipe, of course, only a hunger for living space

London used to be known as the Great Wen, meaning the tumour on the face of England, the pestiferous, polluted, insanitary, seething mass of humanity and industry that was the capital, a place from which anyone with any sense would flee without a second thought.

But times have changed. London has become the Great Magnet, startling figures showed yesterday, drawing eager new people into itself at a faster rate than any city in Europe, and perhaps in the developed world.

A report commissioned for the Mayor, Ken Livingstone, showed the capital's population is likely to surge upwards by nearly 750,000 people in less than 15 years, from 7.47m today to 8.15m in 2016, an increase way beyond all recent predictions. (The estimate is far higher, for example, than the 1996 one from the Office for National Statistics, which envisaged a London population by 2016 of 7.6m, half a million lower than the new projected figure.)

The capital's population growth rate seems to have taken off in the Thatcher boom of the mid-to-late Eighties, and since 1989 London has already grown by 600,000, equivalent of a city the size of Sheffield. In the past two years alone, London's numbers have grown by 190,000, and by 2016 it will absorb another 700,000 people or more, the equivalent of a city the size of Leeds.

How on earth will it cope?

Londoners who now struggle with traffic-clogged and polluted streets, trains and Tube services stretched to breaking point, soaring violent crime, unaffordable housing, racial strife and a lottery-by-postcode to decide who benefits from the best public education and health care might well ask, how can such a loudly creaking infrastructure accommodate such severe new pressures without falling apart?

Mr Livingstone, ever the astute politician, said yesterday that London could do it, as long as the right policy decisions were taken now, and enough new jobs kept coming in, and the Government made sure important infrastructure projects went ahead.

The capital was half-way through the most vivid period of growth in population since the aftermath of the Industrial Revolution in the reign of Queen Victoria more than 100 years ago, he said. "We have caught this just in time," he added. "But if the Government fails then London will become intolerable within a decade."

But far from deprecating the forthcoming population increase, Mayor Livingstone positively welcomed it, because the report indicated that with the people would come hundreds of thousands of jobs. He agreed with the report's conclusion that the postwar policy of dispersing people and economic activity away from London to New Towns and estates outside the Green Belt had been wrong. "While this postwar policy of dispersal eased pressure on public services, it also weakened the London economy," the report said.

The report sets out the scale of the challenges London will face. In education, the capital will need 130 more schools, and more than 3,000 more teachers by 2016. More than 23,000 extra homes every year will be needed, with investment of £6.1bn to build 10,000 affordable homes annually;

In public transport, if the new Crossrail, Hackney-Southwest and East London rail extensions can be built they will make " a huge difference". And the 27 per cent of the population made up of non-white communities will increase to 31 per cent.

But the report offers economic hope in that the number of jobs in the capital is expected to grow in the period to 2016 by 600,000.

That the capital and the South-east are growing much faster than the rest of Britain has been evident for some time, as the resultant economic imbalances have shown up in such visible indicators as house prices, falling or rock-bottom in parts of the North, but soaring without apparent limit in parts of the capital.

But what has perhaps not been realised is the rate of increase. Adding the equivalent of the population of Leeds in 15 years is an unprecedented leap.

Rapid and massive growth in the size of cities has been a typical phenomenon of the developing world in the past five decades. Africa had two cities with more than a million people in 1950, but 27 in 1990; Asia had 26 in 1950, but 126 at the later date; and Latin America had seven million-people cities in 1950, but 38 just 10 years ago. (The figures will be even greater now, but 1990 is the latest year for which there are reliable census figures.) Even more striking in the developing world has been the growth of the mega-cities of more than 10 million inhabitants; there were 12 by 1990, including Lagos, Mexico City and Jakarta.

Big cities in the industrialised West have grown much more slowly. Yet London now seems to have shot off at a pace all its own. The globalisation of financial services has undoubtedly helped, because London is the financial capital of Europe, among the three "world cities" of capitalism, beside New York and Tokyo.

Another factor – although not mentioned in the report – is almost certainly that London is the world capital of English, beyond challenge the international language, and most of the speakers of the 300 languages found in London are likely to have headed there to learn it.

"London is becoming a great immigrant gateway as New York and Boston were in the 19th century," said Tony Travers of the London School of Economics, an academic expert on the capital.

"International immigration is what's driving the population increase, with a whole range of people coming in, from top-end workers in business and financial services, through middle-market workers such as doctors, nurses and IT experts, many from South Africa, Australia, India or Russia, to asylum-seekers. There are thousands of kids coming in from Eastern Europe to work in Starbucks for a year.

"Can London cope with another 700,00 in 15 years? Housing and public services will be the key. But I would expect that public services will not keep up, and that more people will come to rely on private services, such as private health, private education and private security."

Capital figures

* London's population is predicted to rise by about 700,000 people ­ equivalent to the population of Leeds ­ between now and 2016.

* It has already risen by 600,000 ­ equivalent to the population of Sheffield ­ since 1989, with nearly 200,000 of the increase coming in the late 90s.

* The rate of population growth is probably the fastest of any city in the developed world.

* The capital will need about 400,000 new houses, 130 new schools, three new rail lines and 600,000 new jobs to cope.