ONE in three children now live in poverty - a leap from one-in-10 when the Conservatives first took power in 1979, according to a report published yesterday.

Divided Britain, by the Child Poverty Action Group, paints a picture of growing poverty and inequality throughout Britain over the past 18 years.

The report, timed to coincide with General Election campaigning, follows a 27-year CPAG tradition of examining the record on poverty of the out-going government.

It states that between 1979 and 1993/4, the number of people living in poverty (defined as living on below 50% of average income after housing costs) rose from five million (9% of the population) to 13.7 million (25%).

Among children the rise was even more dramatic, up from 1.4 million (10% of children) to 4.2 million (32%).

Between 1979 and 1993/4, the report says Department of Social Security figures showed a massive growth in incomes inequality. Real incomes (after housing costs) of the bottom tenth of the population fell by 13%. Average real incomes rose by 40% and incomes for the top tenth of the population rose by 65%.

The report states that figures from the Low Pay Unit show a 10% increase in the number of people earning less than the Council of Europe's decency threshold between 1979 and 1996 - up from 2.5 million to 10.4 million.

Sally Witcher, director of CPAG, said: ''This report confirms categorically the gaping hole that has been cut through Britain's social fabric.

''This election could mark a clear turning point if all political parties gave clear targets for a reduction in inequality.''