The number of children living below the breadline rose by 100,000 last year, according to official data – a blow to Gordon Brown, who wants to halve child poverty by 2010.

The increase was branded a moral disgrace by a leading children’s charity.

In 2005-06, some 2.8 million children were in poverty, rising to 3.8 million when housing costs were included. This was a jump from 2.7 million and 3.6 million respectively the previous year.

Martin Narey, the chief executive of Barnardo’s, said that the figures were unacceptable. “This is a moral disgrace. In 1999 we were all excited by the Government’s determination to eradicate child poverty and, on the way, to halve it by 2010.

“It is now clear that what it meant was that it intended not to halve child poverty by 2010, but to reduce it a bit,” he said.

“Today’s depressing figures show that poverty is increasing, inequality is rising, and the incomes of the poorest fifth are in decline,” George Osborne, the Shadow Chancellor, said.

“Gordon Brown made tackling poverty the great promise of his Chancellorship, and yet he leaves the Treasury with poverty rising. His whole approach of simply throwing money at the problem has failed. Now his con-trick Budget will make things worse by increasing the tax bills of the low-paid, and reducing work incentives.”

Mr Osborne said that the Conservatives would take a different tack, based on social responsibility alongside financial support through tax credits.

Since the benchmark year of 1999, some 600,000 children have been lifted out of poverty. But to stand any chance of meeting the target, ministers will need to help an additional 1.1 million children to rise above the poverty line by the end of the decade.

Jim Murphy, the Welfare Reform Minister, said the Government remained committed to the target and pointed to measures in last week’s Budget to bring increases in child benefit and tax credits in 2008. He said that £150 million would be “refocused”, the new deal for lone parents scheme would be extended, and a new deal for families piloted.

The Government also pledged to provide more support for families, particularly in London where employment rates lag, including the widening of the inwork credit scheme. Department officials said that lower incomes from self-employed workers who may have said that they were earning less than they did, accounted for some of the increase in child poverty.

But the Disability Rights Commission urged the Government to focus more on helping families with disabled children or parents, pointing out that one in three children living in poverty had at least one disabled parent. “This is not a matter of ‘special pleading’, but a determining factor in whether the Government’s child poverty goals will be reached,” Sir Bert Massie, the chairman, said. “For the huge numbers of families affected by disability, the Government’s child poverty strategy is critical to improving their life chances.

Mr Narey added: “We are a country where we can countenance individual bankers getting annual bonuses of £22 million while we give a family of two parents and two children, living on benefits, £10,000 to live on for a whole year.”

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