The minimum wage is failing British workers and needs to be reformed, according to the man who introduced it in 1999.

Low Pay Commission founding chairman Sir George Bain said the desired "ripple effect" of increasing wages upward had not worked, even though the national minimum wage had lifted thousands out of extremely low pay.

Mr Bain led a review on the national minimum wage published yesterday, which recommended the government set an explicit ambition to reduce the number of low paid workers.

It also suggested giving the LPC powers to press employers to go beyond the national minimum wage when they can afford to.

He said: "I think it's a very good time (for reform), because even people who are quite conservative realise that there are limits to which you can go, in terms of inequality, without beginning to rip the social fabric."

General union Unite welcomed Mr Bain's call and urged the government to significantly boost the national minimum this year - by at least £1.50 an hour.

Unite general secretary Len McCluskey said: "The UK is the seventh-richest country on the planet.

"There can be no excuses for the growing reliance of people in work on food banks - wages should be enough to live on.

"So let's have some real help for struggling households, beginning with a £1.50 rise in the national minimum wage."

Labour shadow minister for trade and investment Ian Murray drew attention to the urgency of the matter.

He said: "The value of the minimum wage has been eroded since the Tory-led government took office, as prices have risen faster than wages and families have been left £1,600 worse off, so ministers need to act now."