Redirect money to halve child poverty, says Barnardo's

According to the report, How to Halve Child Poverty, changing the way child tax credits are paid could lift up to 700,000 children out of poverty.

It is widely thought the government will miss its own target of halving child poverty by 2010 and some ministers have acknowledged this.

The report said if the government redirected money it is paying families to compensate for the 10p tax rate towards child poverty, it would be more effective in reducing poverty.

It sets out three options for reducing child poverty - increasing child tax credit, focusing increases in tax credits on families with more than three children, and giving extra support to families with new babies and those in work.

Martin Narey, chief executive of Barnardo's, said: "When the government invested £2.7bn to compensate losers of the 10p tax rate abolition, the benefit to families in poverty was essentially zero. Spending decisions aren't easy but surely, when it comes to children living in poverty in our country, there is no choice."