Britain is in danger of creating a generation of illiterates, Julia Donaldson, the Children's Laureate, warned last night. Ms Donaldson, who wrote The Gruffalo, is one of the nation's best known children's authors. She is concerned that library cuts and closures will make the UK a less literate society and bring a host of social problems in their wake. Nearly 260 libraries are earmarked for closure or have been closed since April, according to Public Libraries News.

In an open letter to Maria Miller, the newly appointed Culture Secretary, Ms Donaldson, asks the Government to act swiftly to save Britain's libraries, suggesting that Downing Street should use part of the education budget for a rescue plan. The letter challenges the Culture Secretary to show "leadership" on behalf of young readers, and calls for the ring-fencing of spending on children's libraries.

On the eve of a nationwide tour to promote the benefits of libraries, Ms Donaldson warned: "Today, many towns have no bookshops. If they also have no library, where are children to find books? Is it a surprise that we are always reading horrifying statistics about the number of homes without books? If children don't discover what books they like, they are unlikely to become life-long readers, and we are therefore heading for a less literate society. Illiteracy leads to lower skills, greater social problems, higher crime rates, and a country less able to prosper in the global jobs market. Cutting libraries is a false economy. They are the best literacy resource that we have.

"Children's use of those libraries which are still open has actually been rising over the past seven years, so please do not deprive them of the storytelling sessions, the homework clubs, the expert librarians and, above all, of the free books," she added.

Ms Donaldson slammed the coalition for its handling of library closures, which she said amounted to nothing more than "hypocrisy" and "spin". "The Government has a fundamental duty to superintend library services and where there are serious complaints about cutbacks, it is the duty of the Government to intervene." She added: "I find it shocking that the Government says it's 'monitoring the situation' without actually doing something."

Ms Donaldson is the latest author to speak out about library closures. Others have included Zadie Smith, Beatrix Campbell, Kate Mosse and Robert Harris.

And people are starting to take action. In north London, squatters last Wednesday broke into Friern Barnet Library whose doors closed earlier this year, with the aim of turning it into a community-run centre.

And next Wednesday, Martin Horwood, the Liberal Democrat MP for Cheltenham, is due to speak in a parliamentary debate about the Government's failure to intervene in the fate of libraries in Gloucestershire, seven of which are earmarked for closure, despite a successful legal challenge to the closure decision in the High Court. "This is a flagrant breach of the duties to superintend and calls into question the whole system, of why the law even exists in the first place," he said last night. The Commons Culture Select Committee is due to report in October on its findings into library closures.

The Government's failure to intervene in library closures around the country is expected to result in further legal challenges. Lawyers acting for campaigners fighting to keep open six libraries in Brent, north-west London, are looking into Downing Street's lack of intervention under Section 10 of the 1964 Libraries and Museums Act, which decrees all public complaints over libraries should go to the Secretary of State for Culture, Media and Sport.