The report, commissioned by prime minister Alain Juppe, was presented by Pierre Lequiller, who is chairman of an illiteracy campaign as well as member of parliament and mayor of Louvecinnes.
"Illiteracy is very serious and widespread in France, and the response of society and the public authorities to it is largely insufficient," said M Lequiller.
He said it made life more difficult for the unemployed, and was associated with many other factors of exclusion, creating a cultural disparity which can have repercussions from generation to generation.
According to surveys carried out by the education and defence ministries, one French person in five is unable to read or to understand a text of 70 words (their criterion for defining illiteracy).
France pulled out of an Organisation for Economic Co-operation and Development study into reading proficiency, the results of which were published in December, when it appeared to be trailing badly in an international comparison.
This study found 40 per cent of French people to be "functionally illiterate", lacking the basic reading skills necessary for daily life, such as reading a bus timetable.