New figures published by the Department for Work and Pensions showed the number of children living in households below the poverty line rose by 100,000 in 2006-07. This was the second rise in two years.
Children in lone-parent families were more likely to be living in low-income households, as were children in workless families, children with a disabled family member and children in ethnic minority households.
Children in inner London had a greater risk of low income than any other region - nearly half were living in poverty.
Child poverty campaigners have said the new figures make hitting the 2010 target extremely unlikely.
Kate Green, chief executive of the Child Poverty Action Group, said: "Failure in 2010 would not be due to a lack of national wealth, but a lack of moral leadership. Why should Britain's children suffer more than children in other wealthy countries?"
The group is calling for the government to invest £3bn to halve child poverty by 2010.
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