Over three million children will be living in poverty in the United Kingdom by 2020 as the recession pushes hundreds of thousands more families onto the breadline, economists predict today.

A critical analysis by the Institute for Fiscal Studies and the Joseph Rowntree Foundation shows that Gordon Brown will badly miss both his much-trumpeted child poverty targets over the next eleven years without a £4.2 billion cash injection.

The Prime Minister’s bold ambition to eradicate child poverty by 2020 always looked optimistic. But the IFS data shows that despite improvements in tax credits for those in work this year, the picture will deteriorate dramatically as the recession bites deeper. A planned rise in the number of lone parents in work for example just would not happen as those already unemployed were unlikely to find a job, it showed.

Mr Brown, when Chancellor, set targets in 1998 to halve the 3.4 million children at that time living in poverty to 1.7 million by 2010 and eradicate it by 2020. Recently the Prime Minister has pledged to legislate for the second figure.

But the IFS report for the Joseph Rowntree Foundation predicts that the Government will miss its 2010 objective by 600,000 and its 2020 goal by about 2.5 million. There are now about 2.9 million in children in poverty following an unexpected rise in 2006/7 but the new report shows that after a small drop next year the figures will grow again steadily to 3.1 million.

Poverty campaigners argued that as people lost their jobs and relied entirely on state benefits children previously living near or at the poverty line would experience much more serious hardship. Gone will be the visits to the local shops or the swimming pool and new clothes, toys, or even friends round for tea will go out of the window, said the Foundation.

The Tories said the report showed that the Government’s “one-dimensional” approach to tackling poverty had failed. “Simply relying on means-tested benefits to address the symptoms of poverty is an unsustainable approach,” said Theresa May, shadow Work and Pensions Secretary. “Instead we must tackle the root causes of poverty, such as educational failure, family breakdown, drug abuse, indebtedness and crime."

Privately the Tory party has confirmed it is looking at dropping the 2020 target. Their priority is to get people into work, which would give them “long term independence”, rather than pouring money into the tax credit system, which introduce perverse incentives, they claim.

The IFS analysis says that the Government would need to spend £4.2 billion on tax credits for low income families just to hit its short term targets for 2010. The cost of doing this had risen significantly from previous forecasts because the “dramatic deterioration” in public finances was pushing people further below the poverty line than originally expected.

The Institute suggests that initially about 600,000 children will be helped out of poverty by 2010 through a £25 weekly increase in tax credits from this April and a £22 a week rise in child benefit. But this is still 600,000 short of the original target and will do little to stop the situation getting worse in the next decade.

Donald Hirsch, a co-author of the report from the JSF said the challenge in a recession would be to build on the progress already made in reducing child poverty. “ But it is unrealistic to assume that planned welfare-to-work measures will bring large increases in the number of parents with jobs, as in previous projections,” said Mr Hirsch.

“ During the recession, those families who remain out of work will need extra money if they are to avoid severe poverty, which can do irreparable harm to children who grow up in such circumstances.”

Yvette Cooper, chief secretary to the Treasury said Government action over the past decade had already prevented hundreds of thousands of children growing up in poverty. “It's right to be ambitious and our targets are about the kind of society we want and the future we want to build for our children. Preventing child poverty is about more than financial support - it includes services from Sure Start to Decent Homes to give families a better start in life."

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