Ministers will respond to the report by unveiling a new anti-poverty strategy, including the publication of 40 ambitious targets to improve the lives of the poor.
The findings of the survey of poverty and exclusion compiled by the department of social security are said to have shocked ministers, who say it proves the need for a new battery of 'success measures' to show whether the government is making real inroads into Britain's underclass.
The report will show the growing divide between the 'work rich' and the 'work poor', with one in five families having no one in employment even though 500,000 jobs have been created since the 1997 general election.
The goals will include reducing the number of children living in low-income families; reducing drug use; raising the life-expectancy of the over-65s and increasing the number of elderly people who can live in their own homes.
Labour has already pledged to eradicate child poverty in 20 years. Yesterday Gordon Brown, the chancellor, said that the new tax credit would lift 1.25m people out of poverty, including 800,000 children.
Launching a£12m advertising campaign to promote the new scheme, Mr Brown said the families would be better off by an average of£24 a week.