Britain will overtake Germany and France to become the biggest country in the EU in 50 years' time, according to population projections unveiled yesterday. A survey of demographic trends finds Britain's positive birth rate contrasting strongly with most other large countries in Europe.

The impact of population shrinkage, coupled with the ageing of key European societies, spells big problems for pensions, health and welfare systems across much of the union, says the report, published by Eurostat, the statistical service of the European commission.

But Britain, it says, is likely to suffer less because of its strong population growth and the younger average age of British society.

Immigration is singled out as the sole mitigating factor, seen as crucial to maintaining population growth. But the report says this probably will not be enough to reverse the trend of population decline in many countries.

The survey predicts that Britain's population by 2060 will increase by 25% from the current figure of just over 61 million to almost 77 million.

Germany is the biggest country in the EU, with more than 82 million people, but it is likely to shed almost 12 million by 2060, says the report. The widely praised family policies and support of working women in France means that the French population will rise to almost 72 million by 2060.

With the British birth rate now at its highest in a generation - 1.91 children per woman according to the Office for National Statistics last week - the UK has less to fear about any "generation wars" brought on by the "demographic timebomb" of ageing and shrinking populations where those in work cannot support the pension needs of retired citizens.

"With climate change and globalisation the ageing of the population is one of the major challenges Europe must face," said Amelia Torres, a commission spokeswoman.

Of the biggest six EU countries (Germany, France, Britain, Italy, Spain and Poland) Britain has by far the greatest birth rates. Only Luxembourg, Cyprus, and Ireland are growing faster than the UK.

The average age of Europeans is now just over 40; this will be 48 by 2060. The average age for Britons is 39 and will be 42 in 2060 - the lowest age in Europe with the exception of Luxembourg.

The EU's population now stands at 495 million and is projected to rise to more than 520 million by 2035, before falling to 505 million by 2060.

"From 2015 onwards deaths would outnumber births, and population growth due to natural increase, would cease," says the survey, assuming a net migration inflow to the EU of almost 60 million over the next 50 years. "Positive net migration would be the only population growth factor. However, from 2035 this positive net migration would no longer counterbalance the negative natural change."

Across the EU's 27 countries there are now four people of working age for every person over 65, but by 2060 that ratio will be 2:1, causing stress on welfare and pension systems. Torres said pension and health systems had to be reformed.

Fourteen of the 27 countries are projected to have smaller populations in 50 years' time. The survey reveals striking contrasts, between eastern and western Europe and between the north and south, with Scandinavia and Britain comparing positively with Mediterranean Europe, while central and eastern Europe see chronic population depression.

The number of people aged 65 or more broadly doubles across the EU, with Britons of retirement age being almost 19 million. While the number of Germans of working age is predicted to decline from 54 million now to 39 million by 2060, in Britain the figure rises by more than 4 million.

Across the EU, the number of children under 14 will drop from 77 million to 71 million, but in the UK the number rises by 2 million. In Britain the proportion of over-80s will double to 9% while across the EU it will triple to 12%.

The UK population is increasing at a rate of around 1,000 people a day according to figures released by the National Statistics agency earlier this month.

Children aged under 16 represent around one in five of the total population, around the same proportion as those of retirement age. UK fertility rates dropped steadily during the 1980s and 1990s but began to increase again from 2003.

People power

By 2060, the population of major Europen countries will be:

UK 77 million

France 72

Germany 71

Italy 59

Spain 52

Increases in population by 2060:

Cyprus 66%

Ireland 53

Luxembourg 52

UK 25

Decreases in population by 2060:

Bulgaria 28%

Latvia 26

Lithuania 24

Romania 21

The strongly Roman Catholic countries of Europe are having fewer babies. The Italian population will stay the same over the next 50 years, while Poland's and Lithuania's will shrink considerably. Spain's population is forecast to increase by 6 million. Life expectancy is also rising. In Ireland, women will live to 89 and men to 85. Almost one in three Europeans will be of pensionable age if 65 remains the threshold.