The new target, announced as part of the Chancellor's spending review, takes housing costs into account - a key demand of campaigners. A further target will see a reduction in the proportion of children living in workless households by five per cent between 2005 and 2008.
Brown gave more details on how the Government intended to meet its main target to halve the number of children in households in relative low income by 2010 and said he would assess progress towards the 2010 goal in future budgets and pre-budget reports.
Better childcare would be at the heart of his fight against child poverty, he said.
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