ONE million people are living below the poverty line, with a large increase in the number of families with children who are struggling financially, according to a Scottish Government report.

The annual Poverty And Income Inequality In Scotland Report says there has been a reversal in the trend of recent years, when deprivation levels have fallen.

The latest figures, for 2012/13, show 820,000 people were classified as living in poverty, an increase of 14 per cent on the previous year, with the number of children in poverty increasing by 30,000.

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When housing costs are factored in, one million Scots, including 220,000 children, were living in relative poverty. This is defined as being part of a household with an income of less than 60 per cent of the national average of £374 per week.

There were also 150,000 pensioners in the category, an increase of 10,000 in 12 months.

The UK Government's welfare reforms have been blamed for the rise, with the report saying contributing factors include an overhaul of the benefits system, tightening of eligibility for tax credits and stagnating wages.

The statistics were labelled "shocking" by child poverty campaigners, while the Scottish Government said independence would enable it to support the most vulnerable in society.

However, the Department for Work and Pensions said the UK Government was committed to tackling the root causes of child poverty, while Labour accused the SNP of not doing enough with the powers it has.

John Dickie, head of the Child Poverty Action Group, said the "shocking" figures represented the "turning of the tide" on child poverty. He added: "After years of real progress 30,000 more children have already been pushed into poverty in Scotland and massive increases are forecast for the years ahead.

"Behind these statistics are tens of thousands of children across Scotland who, despite their parent's best efforts, will see their health undermined, education damaged and life chances thwarted unless government at every level acts with the utmost urgency."

Deputy First Minister Nicola Sturgeon said: "Scotland is one of the richest counties in the world and there is no reason for children to be living in poverty in our society. Westminster welfare reforms, such as the reduction in in-work tax credits, are reducing incomes for some of our poorest households."

The report said 52 per cent of adults and almost six in 10 children in poverty lived in a household where at least one person was in work. There was a fall in average income in the period, with the poorest households hit hardest, and a small increase in income in the wealthiest households.

MSP Jackie Baillie, Labour's social justice spokeswoman, said the figures were "completely unacceptable", but said the SNP was to blame as well as Westminster.

"This substantial increase should shame the SNP into using the powers they already have to tackle an issue that blights Scotland," she said. "With almost one in five children now living in poverty and 10,000 more pensioners struggling to make ends meet it is disgraceful the Deputy First Minister's response was essentially 'it'll all be better under independence'. They can and should act now."

A DWP spokesman said: "Under this Government there are 300,000 fewer children living in relative income poverty and 290,000 fewer children in workless households across the UK. As part of our long-term economic plan, we have seen the largest rise in employment for more than 40 years and unemployment is falling. Relative child poverty in Scotland has fallen since the mid-1990s and is lower than 2009/10 levels."