Figures released by the Ministry of Housing, Communities and Local Government reveal that there were 2,420 households with children in B&Bs at 31 December 2018 - 34.7 percent of all households living in such accommodation - up from 2,050 at the same time in 2017.
Of those, 810 households had been living in a B&B for more than the statutory limit of six weeks, although this was an eight per cent decrease on the previous year.
Councils have a duty to only place families with children in a B&B when no other emergency accommodation is available, and try to move them to more suitable housing as soon as possible.
In all, 83,700 households were in temporary accommodation at the end of last year, of which 61,740 households (74 percent) included dependent children. This amounted to 124,490 children in temporary accommodation.
Of the households with children, 56,030 (91 percent) were in self-contained accommodation, such as private sector rented houses or local authority housing stock.
Local Government Association's housing spokesman Martin Tett said that many councils are struggling to cope with rising homelessness and to find suitable accommodation for those in need.
"The increasing use of temporary accommodation is not only financially unsustainable for councils but is hugely disruptive for those families placed in such accommodation," he said.
"With homelessness services facing a funding gap of more than £100m in 2019/20 and £421m by 2024/25, the government needs to use its upcoming Spending Review to sustainably fund homelessness prevention."
John Sparkes, chief executive of housing charity Crisis, called the figures "shocking and heartbreaking", adding: "More and more people are becoming trapped in these B&Bs for months or even years at a time with no hope of moving on, in part because local housing allowance (LHA) no longer covers the true cost of renting in large parts of the country."
He added that the Homelessness Reduction Act, which was introduced in April 2018 and placed duties on councils to prevent and relieve homelessness, has potential to address the issue but it will only work if measures that tackle the root causes of it are brought in.
"That's why we need to see government bring LHA back in line with market rents," said Sparkes.
"It will help to stop people becoming homeless in the first place and give those stuck in temporary accommodation the chance to access the safe and stable homes they need to move on with their lives."
Communities Secretary James Brokenshire said the government is investing £1.2bn to tackle homelessness, as well as "empowering councils to build more council homes to ensure everyone has a safe and secure home to call their own".