Kendall achieved her career ambitions, and is now a company director. But motherhood proved elusive. The couple started trying when she was 30 and by 36, after years of struggling to conceive, had embarked on IVF. Two painful attempts later, they conceded defeat.

Childless at 47, Kendall now hugely regrets focusing on her career: 'It's not worth giving up something like having children for the sake of a job. My advice to any woman or man is to put having a family first.'

According to today's findings from the Institute of Public Policy Research think-tank, however, there is another way - one that could avoid painful choices between a satisfying career and a fulfilled family life. It argues that women have not suddenly stopped wanting children: a life of long working hours, expensive childcare and dual-income mortgages has simply made it too hard. Or as Shirley Conran, author and mother of two, puts it, modern motherhood 'is a rotten deal, and if it wasn't wrapped up in sentiment and we weren't affected by our hormones, no one would consider it'.

Torn between maternal instincts and the desire to do what they have been educated and inspired to do at work, women are struggling to find the right time to jump off the career carousel. Leap too soon, and they might never get back on, watching male colleagues sail past them; too late, and some will be too old to conceive. Men, too, can put children well down a priority list usually headed with one word - career.

Many thirtysomething women, of course, are only too aware of ticking biological clocks but have not found suitable partners. But even for couples, the trend to delay parenthood may reflect sound economic sense.

Amalia Miller, who is a 28-year-old economist at the University of Virginia, was motivated to research the issue by her friends' endless debates over the right age to conceive. She calculated in a study published last year that deferring birth by a year could boost a woman's salary by up to 10 per cent.

The pay hit from motherhood is caused by mothers returning to jobs with shorter hours, lower pay or worse promotion prospects because these fit better around children - a phenomenon Kendall saw in action. She pretended in job interviews not to want children in case it held her back. 'Women who'd had children seemed to fall off the radar,' she says. 'They were either demoted or worked part-time or were written off.'

However research suggests that delayed motherhood incurs less of this cost, probably because more established employees can either afford better childcare or negotiate better deals with their employers. But work is only part of it. The lengthy 'kidulthood' enjoyed by many men and women - almost a quarter of men aged 25-29 still live with their parents - and high house prices forcing couples to save up longer to buy have built delays into the process of starting a family. The average age of marriage rose from 23 for women in 1971 to 29 in 2004, shunting conception forward into their thirties where waning fertility makes it harder.

But heartbreaking as it is for the involuntarily childless, the baby drought does not just affect would-be parents. Britons have not reproduced at the 'replacement rate' - 2.1 children per couple, enough to replace each parent when they die with a little leeway for childhood deaths - since 1972. While greater life expectancy and immigration have kept the population growing - Britain's 60 million population will rise by five million over the next 20 years - the lack of babies at one end, and growth of retirees at the other, creates a top-heavy, disproportionately ageing population and a serious economic challenge.

Taxes paid by today's children will support their parents' state healthcare and pensions as they age. As Jenny Watson, chair of the Equal Opportunities Commission, puts it, children are not just a private joy but an economic good: 'If people choose to have children we should support them to do that - not least because I'll need their children to pay for my pension in the future.'

So if public policy and workplace practice now threaten that future, can declining fertility be reversed?

When Peter Costello, the Australian finance minister, unveiled what he described as a budget for children, it could have been an echo of Gordon Brown. Rather more startling was Costello's exhortation that women should now have one child for themselves, one for their husbands 'and one for Australia'.

The birthrate is falling not just in the UK but across developed economies - reviving in some the concept of using taxpayers' money to pay women to have babies. The practice has dark echoes - IPPR director Nick Pearce says it is historically associated with 'nationalist ideology, wanting to populate your country and maintaining the race' - but is increasingly popular.

Middle-class mothers in France get a £675-a-month tax break for a third child, Italian parliamentarians recently debated paying women not to have abortions, and in Singapore married couples who have children before the age of 28 get a £7,000 tax break. The Japanese government, fearful of its workaholic culture killing romance, funds a dating service for singles, while in Austria suggestions have included giving parents greater voting rights than the elderly.

The IPPR team, however, found limited evidence that such policies work, while throwing cash at mothers regardless of income skews benefits away from the neediest children. Kendall, too, is appalled at the idea of tax breaks for having babies, 'because it tells women who can't have children that they are worthless'.

Except for France, Pearce argues the only European countries bucking the birthrate trend are the Scandinavians, who do it by offering generous childcare, maternity and paternity leave. The 'fertility penalty' - the amount women sacrifice in earnings for motherhood - is four times lower in Denmark than in Britain. Nordic countries are reproducing more enthusiastically than the Catholic cultures of Italy and Spain and offer a model adaptable to British culture.

In Britain, Conran agrees that intelligent young women have been influenced by watching older colleagues struggle: 'They look around the office at the working mothers, see them whispering furtively into their mobiles to the au pair, having not been to the hairdresser in months, and think "that's not for me".' For couples who do take the leap, penalties are not only financial. Conran cites a woman banker friend who had two children in quick succession but dared not slow down professionally because 'she didn't want her replacement [during maternity leave] taking her job'. But if judging the right professional moment to conceive is hard, advice on the best biological time is a minefield.

When consultant obstetrician Susan Bewley and her colleague Melanie Davies published an article in the British Medical Journal last year, warning of an increasing number of older infertile women patients and suggesting that those really wanting to be mothers should not risk leaving it until their thirties, a media firestorm erupted. Should women really rush back the kitchen sink?

The furore buried the doctors' core message - that women were not to blame for their dilemma, and that employers and policy makers should be making it easier to mix children and career.

While fertility does decline after 35, more than one in seven women in England and Wales still conceives in this age group. A 40-year-old undergoing IVF has a one in 10 chance of a baby, while the fortysomething pregnancies of Cherie Blair and Madonna show nature is kinder to some women than others. Nonetheless, the IPPR report warns that an 'ostrich-esque' attitude to biology is not helping. Co-author Julia Margo says women need practical information about conception chances: 'We need to inform people about what happens to the fertility rate, and to their individual rate.'

The other missing voice is that of fathers. David Cameron won praise for taking paternity leave for the birth of his son last week, but former Tory MP David Mellor's denunciation of such 'escapist nonsense' illustrates the dilemmas for men keen to commit to family life. 'You've got women who would like to have more children and fathers who might like to be more involved, and it's not working for any of them,' says Watson.

Pearce argues more generous paternity leave, and parental leave reserved exclusively for fathers, might help couples take the leap and also encourage different decisions about which parent goes back to work.

If anyone can get the balancing act right, it should be Katherine Rake. The new mother of a baby son, recently back from maternity leave, she is also a leading economist whose research for the LSE first illustrated the professional cost of childbearing.

A 24-year-old mid-skilled woman giving birth would, she found, earn a staggering £560,000 less at today's prices over her lifetime than a childless counterpart. Giving birth at 28 would only cost £165,000. Surely Rake could choose when to have a child with scientific precision? She snorts with laughter and denies it. 'There's an awful lot of muddling through.'

Now director of the Fawcett Society think-tank, Rake has spent her professional life campaigning for better childcare and says motherhood has only made her more committed, but cautions against making the case on demographic grounds.

'There's a whole other argument, which is that we don't actually need any more people in the world,' she says. Environmentalists argue that while Western economies require population growth, a crowded planet would benefit from fewer humans.

The immediate challenge for a generation of young women keen to be mothers, however, is a rather more personal dilemma: is there a way of getting the motherhood decision right?

The first step may be being adaptable if the best-laid plans go awry. Julie Dougherty, a nurse manager from Glasgow, was so maternally minded in her early 20s that she moved back to the town she was born in with a plan to get married and pregnant.

Events in her life put her off, however, and it was not until 33 that she began thinking again about children - only to find her partner did not want them. Now 36 and single, she recognises that there is a 'huge possibility' she will never be a mother and while the thought has reduced her to tears, watching the strains children placed on her friends' relationships has left her with mixed feelings about motherhood.

'Sometimes I grieve for the children I'll never have, but I'm enjoying my life too much to do anything drastic like adopt on my own or get pregnant by some random guy.'

Determined prospective mothers meanwhile may be best advised not to backpedal professionally but to aim higher: more senior women can both afford enough childcare to stay in work, and may be more valued by their employers. While 28 per cent of new mothers return from maternity leave in a lower-paid job, that rises to 50 per cent among unskilled workers.

'Highly educated women are able increasingly to "look like men" in terms of their labour market participation, but lower skilled women aren't,' says Rake.

Sadly, however, there is no expert consensus on the right time to conceive. Conran says terrifying twentysomethings into getting pregnant risks them 'never getting a start' at work, and avoiding the risks essential to a high-flying career. 'You do become less daring once you have a child.' Others point privately to Bewley's research, which suggested not leaving it past 35.

Rake admits that not even her profession has the answer. 'You just have to do it at the time that feels right emotionally, and let economics follow. Thank God we don't make purely economic decisions, otherwise none of us would ever have children.'

Demographers may have to hope she is right.

The chidless generations

· Britain experienced a similar fertility drought after the First World War. A quarter of women born around 1900 were childless: of the generation born in 1990, 22 per cent of women are expected not to have children.

· There will be 107,000 fewer children in Britain in 2020 than now. Last year, 22 per cent of women aged 35 had not yet had children.

· Seven million people live on their own in Britain, twice as many as in 1973. The number of singletons aged 25 to 44 - the prime child-bearing years - has risen sixfold in that period.

· Within the decade, one in three couples may have difficult conceiving, according to research into fertility rates.

· Raising a child to age 17 costs £65,000 on average.