The government's failure to tackle the growing problem of fuel poverty was yesterday branded a social disaster after it emerged that record numbers of vulnerable households are struggling to pay gas and electricity bills.

According to its own advisers, the government "appears to have given up trying to hit its legally binding target" to reduce fuel poverty, which now blights around 4.5m homes nationally.

In its annual report published today, the Fuel Poverty Advisory Group (FPAG) said more than 2.3m of the most vulnerable households in England alone are now forced to spend at least 10% of their income to heat and light their home.

Across the UK, the number of households in fuel poverty is now at the highest level since Labour came to power.

The advisory group criticised ministers for cutting the grants programme aimed at those in fuel poverty by a quarter during the comprehensive spending review.

This, it said, was despite the Treasury receiving significantly higher VAT receipts on the back of gas and electricity prices that have doubled in recent years.

Peter Lehmann, the outgoing chair of FPAG, yesterday warned the government that it stood no chance of meeting its target of eradicating fuel poverty in vulnerable households.

"The recent measures in the budget, and the Ofgem investigation into the way the market works, are to be welcomed. However, it is difficult to understand why spending on Warm Front, the government's flagship fuel poverty programme, is being cut by nearly 25% in real terms. Fuel poverty has been relegated to a minor status in the government's target framework," he said.

Help the Aged seized on the report as proof of how ineffective the government's strategy had become. "It's not just a policy failure - it's a social disaster for the estimated one in six older households struggling to live in fuel poverty," said the organisation.

"Their number is set to reach the highest level in over a decade. But fuel poverty is not just a statistic - it is a measure, however approximate, of the pain and misery, illness and even death which stems from people living in cold homes which are expensive to adequately heat."

A spokeswoman for the Department for Business, Enterprise and Regulatory Reform said ministers would continue to "explore options and do all that is reasonably practicable to meet them.

"The government is in discussion with the energy suppliers about how best to take forward the budget announcement on proposals to increase energy companies' spend on social programmes to £150m a year."