Analysis by the Children's Commissioner for England found that last year 98,799 children in England left without reaching Level 2 attainment, representing 18 per cent of all pupils, and a rise of 24 per cent in the last three years.
Meanwhile, more than one in three children (37 per cent) receiving free school meals - a total of 28,225 children - were found to have left without any substantive qualifications. The analysis found that since 2015, the rate of children receiving free school meals leaving education without Level 2 attainment has risen at almost three times the rate of their better-off peers.
Children with special education needs are the worst affected group with nearly half (45 per cent) not reaching Level 2 attainment by the time they leave education.
The findings come despite the compulsory school leaving age rising to 18 during the period. Prior to 2015, there had been a steady drop in the proportion of young people leaving education without basic qualifications.
In response to the research, children's commissioner Anne Longfield has written to the government, using her powers to formally request that ministers take action. She has asked the Department for Education to conduct an independent review into the situation and to commit to halving the number of children failing to get a Level 2 qualification by the age of 19 within five years.
She has also asked for the DfE to set out a clear action plan for improving opportunities and attainment of children who do not achieve five GCSEs or equivalents by 16, including access to apprenticeships and vocational courses.
Longfield said: "It is shameful that last year almost 100,000 children in England left education at 18 without proper qualifications. It is particularly unacceptable that children growing up in the poorest areas of the country and children with special educational needs are most likely to leave school without reaching basic levels of attainment.
"While we should celebrate the progress that is being made in raising standards for millions of children, it should never be an acceptable part of the education system for thousands of children to leave with next to nothing.
"The government must urgently investigate why the progress that has been made over recent years in closing the attainment gap has stalled and is now going backwards, and commit itself to halving over the next five years the number of children failing to gain a Level 2 qualification by the age of 19."
However, the DfE said the report "does not provide the full picture", comparing against figures that include qualifications that have since been removed from performance tables because "they did not serve pupils well".
"The proportion of 19-year-olds with vital English and maths GCSEs has actually risen from 50.9 per cent in 2010 to 68.1 per cent in 2018," a spokeswoman said.
"We are working to dramatically improve the rigour, quality and standard of qualifications across the board, and have already done so with GCSEs. These reformed qualifications will help young people achieve the skills they need to get on in life.
"The gap between disadvantaged pupils and their peers has narrowed considerably in both primary and secondary schools since 2011. This year once again, the number of 16- to 24-year-olds not in education, training or employment has fallen and youth unemployment has halved since 2010."