Four out of 10 children in London live below the poverty line, according to a new report.

The report by the London Child Poverty Commission (LCPC), Capital Gains, called for tougher action from the Government and employers to raise salaries and increase employment in the capital.

LCPC found that 41 per cent of the 650,000 children in London are living in a household with an income of less than 60 per cent of the national median.

Half of all children in inner London were found to be living in poverty.

The report, which is the result of two years of research and consultation, called for the introduction of a government minister with specific responsibility for cutting child poverty in London, and for an increase in child tax credit.

It also called for employers and trade unions to help low-paid workers and recent immigrants develop their careers.

Other suggestions included tougher employment targets for Jobcentre Plus, more resources for literacy schemes, and the possibility of introducing a London-specific minimum wage.

Families living in social housing, single-parent families, and some black and ethnic minority groups were facing higher risks of poverty, the commission found.

Carey Oppenheim, chair of the LCPC, said: "It is hard to believe that four out of 10 children are living in poverty in one of the richest cities in the world.

"Eradicating child poverty is one of the biggest challenges facing the capital, and yet what this report makes absolutely clear is that it is achievable, and together we can challenge these entrenched inequalities."

Liberal Democrat London Mayoral Candidate, Brian Paddick called the figures a "disgrace."

He said: "The way out of poverty is education. The Mayor should be making more use of the one powerful tool he has and provide free travel for people in full-time adult training and further education."