The number of children in working families who are living in poverty is "rising sharply" and has "completely destroyed any hope" of the UK Government reaching its target to halve child poverty by 2010.
In 1998, New Labour promised to halve the number of poor children in 10 years and to eradicate child poverty in 20 years.
While the number of people unemployed and living in poverty has been steadily declining, those in work and living below the breadline has been rising sharply, Peter Kenway, director of the New Policy Institute, told a recent conference in Glasgow, entitled "Eradicating Child Poverty in Scotland".
"In-work child poverty across Great Britain is now higher than it has ever been," he said. "We can't any longer do anything with in-work poverty but put it at the top of our list of priorities."
Policy decisions to help tackle poverty, such as the introduction of the minimum wage, should not be knocked, said Dr Kenway, but they were not enough.
He suggested if the UK wanted to tackle poverty, it had to do something about low pay.
However, help that comes from the state can sometimes be part of the problem, he said. Anyone in receipt of tax credits found themselves on a marginal tax rate which could be a barrier to working families increasing their earnings.
Part-working families - where one parent works and the other does not, or both work part-time - were more likely to live in poverty, he continued.
He proposed making all-working families the norm or paying one parent to stay at home.
"We have a deep-seated problem," Dr Kenway concluded, "and need a much bolder approach."
Adrian Sinfield, professor emeritus in social policy at the University of Edinburgh, agreed with Dr Kenway's conclusions, adding that Britain's benefits had to be more generous and that pressure should be brought to bear on employers to improve the pay and quality of jobs.
"Many jobs are so poor and stultifying, employers count on a high turnover of staff," he said.
There was some hope expressed that the new Scottish framework aimed at tackling poverty, Achieving Our Potential, launched at the conference by Nicola Sturgeon, Cabinet Secretary for Health and Wellbeing, and supported by Pounds 7.5 million, had the right emphasis.
Peter Kelly, director of the Poverty Alliance, welcomed its focus on in-work poverty and the recognition that low income was part of the problem. "It might sound banal," he said, "but if you look at previous approaches, they recognise low income but then say 'there are other things we must focus our attention on'." However, he criticised the fact that the forthcoming recession was being ignored, and questioned whether the monitoring and evaluation in the document was rigorous enough.
Save the Children Scotland echoed this concern and felt the approach lacked "concrete action".
Material poverty and the poverty of spirit and aspiration it engendered was a huge problem for schools, said Mary Berrill, quality manager in West Dunbartonshire's educational services. Some schools were having to phone parents to remind them to get their children up. These youngsters would have to be fed in the first half-hour of class and some would fall asleep because "night had been turned into day". In partnership with Save the Children, it plans to establish a new post with the remit of engaging with parents. "We must ensure education works for these children and crucial to that is the engagement of parents," said Irene Graham of Save the Children.