Labour have claimed victory after forcing Iain Duncan Smith into a climbdown on the way child poverty is monitored.

The Government capitulated following pressure from Owen Smith and the Bishop of Durham and agreed to re-instate annual reports on the number of children living in low income households.

Conservative minister Lord Freud has now tabled amendments to the Welfare Reform and Work Bill just days after employment minister Priti Patel argued against the move in the Commons.

The Government had tried to change the definition of child poverty from income-related criteria to instead reflect educational attainment and parental unemployment – a move that would have obscured the number of children in struggling households.

The Tories are, however, persisting with plans to scrap the last Labour government’s target of eradicating child poverty by 2020.

Resolution Foundation has predicted the number of children living in poverty will have risen to 3.8m by the end of the decade, up from 2.3m in 2010, following the introduction of Universal Credit and cuts to housing benefit. Experts have called this the “biggest increase in a generation”.

Today Smith said: “This represents a big victory for the campaigners that have come together to demand the Government meaningfully monitors child poverty.

“Efforts led by the Labour Party, our Peers, the Bishop of Durham [the Right Rev Paul Butler] and the charity sector have together forced the Tories to climb down on their bid to cover their tracks on child poverty. They will now be legally bound to keep monitoring child poverty and Labour will be sure to hold them to account for their failures to address it.

“I’m proud that [in government] Labour lifted over a million children out of poverty and proud that we continue fighting to do all we can to tackle it.”

Charities expressed delight at the Government u-turn but criticised the broader strategy:

“A legally binding duty to publish child poverty statistics reflects the overwhelming view of experts and charities that child poverty must be prioritised and that money matters when we’re discussing child poverty,” said Imran Hussain, a spokesman for the Child Poverty Action Group.

“However, the parliamentary time spent repealing the targets on child poverty shows the Prime Minister’s legacy call for an all-out assault on poverty is in deep trouble.

“We need a broad, evidence-based approach on poverty and life chances, not one which sidelines child poverty because the outlook here is getting bleaker by the day.”

In 1999 the Labour Government promised to “end child poverty in a generation” and reduced child poverty by a third by 2010. Before the 2008 financial crisis the UK had experienced the biggest drop in child poverty in the OECD.