By Dominic Casciani BBC News Online community affairs reporter

London's mayor Ken Livingstone has urged the government to change the way the minimum wage after a report revealed more than half the city's children are living in poverty

The research for the mayor says approximately 300,000 children are living in conditions below the official poverty line in inner London - the highest proportion of anywhere in the UK.

There are huge disparities in living standards between the inner and outer London boroughs, says the report, with approximately 400,000 pensioners also below the poverty line - more than a third of their group.

Anti-poverty campaigners are expected to use the figures to question the government's social exclusion policies, a key plank of its agenda over the last five years.

'London divided'

The report, 'London Divided', finds that across London as a whole, 41% of children are living in poverty.

Percentage of children in poverty after housing costs 2000/01

53%: Inner London 41%: Greater London 30%: England 30%: Scotland 33%: Wales Source: DWP/Mayor's Office

But if the inner London boroughs are taken as a region on their own, that figure rises to 53%. The nearest other region is north-east England where 37% of children are thought to live in poverty.

The analysis supports a report from last year by the London Children's Rights Commissioner. That report found that in one London borough, Tower Hamlets in the traditional East End, 74% of the under-16s lived in households dependent on benefits.

The further away from central London that children live, the more likely they were of being better off, reflecting a long-suspected prosperity divide in the city.

Some 36% of pensioners in the same inner boroughs live in poverty compared to a national rate of 25%.

'Full extent revealed'

Mr Livingstone said: "For the first time this report reveals the full extent of the problem.

Estates: Poverty often next door to wealth

London's formidable wealth generating capacity coexists with truly staggering levels of economic disadvantage.

"The most important role in reducing poverty ultimately lies with central government.

"I am disappointed that reforms of the tax and benefits system are not having the effect in London they have had elsewhere."

He said the government should examine the workings in London of the two key benefits introduced since 1997 - tax breaks for working families and the minimum wage.

Mayor: First report of its kind for London

"We would clearly expect the government to take these issues on board and amend or reform the minimum wage so that we get the same benefit in London as the rest of the country," said Mr Livingstone.

London Divided found the highest levels of poverty in the capital - calculated by working out income after housing costs - among minority ethnic communities.

Some 72% of Pakistani and Bangladeshi children in inner London areas were found to live below the poverty line. Among black children, 55% live in families in similar conditions.

Unemployment rates showed similar disparities by ethnicity (see graph at the bottom of page).

"These figures alone are nothing shore of a national scandal," said Mr Livingstone.

Health officials are already concerned about a rise in tuberculosis in poor areas of London. They say the disease is exacerbated by poor housing conditions.

Campaigners call

Martin Barnes of the Child Child Poverty Action Group called on the government and London authorities to act on the report's findings, saying the gap between rich and poor in the capital was a chasm.

"Today's report reveals a London that many do not see or wish to ignore," said Mr Barnes. "Poor families and communities often live but a short walk from prosperous shops and businesses.

"Central government is best placed to tackle income poverty but nonetheless the Greater London Authority has been slow to give the problem of child poverty the attention and urgency it deserves.

"The fact that there are more references to pigeons than child poverty on the GLA's website is telling and damning. "

In many areas of inner London, families below the poverty line live next door to areas of wealth creation such as Kensington, Westminster and the city.

Women living in Kensington and Chelsea have the highest life expectancy in the UK of 84.7 years. A few hundred yards across the river in Lambeth, that expectancy drops by almost five years.