An analysis by the Children's Society found that 2.2 million English schoolchildren were living below the poverty line, with more than 1.2 million currently missing out on the dinners which are linked to low-income benefits.

If a proposed earnings threshold of £7,500 was introduced for free school meals 120,000 families in England - around 350,000 school-age children in total - would lose out, it said.

Government plans for a system of universal credit to replace the current benefits and tax credits system could mean that hundreds of thousands of families could be left with lower entitlements.

Such decisions risked creating a "cliff edge" with parents having to slash their working hours or take a pay cut to keep their benefits, it warned.

Children's Society's Campaign for Childhood director Elaine Hindal condemned the government's "policy failure" but said it has an opportunity to increase the availability of free school meals to all low-income working families.

"We have shown that there are literally hundreds of thousands of children living below the poverty line who aren't getting a free school meal," she said.

"There is no reasonable defence for this policy failure."

She called for all children living in poverty in England to be entitled to a free meal by October.

Children's Minister Sarah Teather claimed the government remained "totally committed to continuing to provide free school meals to children from the poorest families.

"We are reforming welfare to get more people into jobs as that is the surest way of cutting poverty.

"The reforms mean we will have to think hard about the best way to decide who is eligible for free school meals so they continue to be targeted at those who need them the most."

But Child Poverty Action Group parliamentary and policy officer Tim Nichols said the government should be investing in an extension of free school meals.

"The evidence base shows that the more kids that qualify, the greater the benefits for improving classroom concentration, improving child health and easing income poverty," he said.

"There are clear social benefits with good reason to believe there will be long-term economic benefits too. It's one of those win-win investments that the government really just needs to get on with.

"We cannot seriously expect a long-term solution to getting rid of the deficit if the government doesn't have the confidence to give the green light to policies like this when all the evidence so clearly stacks up on the side of taking action."

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