Children's lives are being impoverished by the government's insistence that schools focus on literacy and numeracy at the expense of creative teaching, the biggest review of the primary school curriculum in 40 years finds today.

Labour has failed to tackle decades of over-prescription in the curriculum and added to it with its own strategies in literacy and numeracy, which take up nearly half the school week, the Cambridge University review of the primary curriculum found.

Children are leaving school lacking knowledge about the arts and humanities having spent too many years "tied to a desk" learning times tables, the head of the review, Robin Alexander, said.

"Our argument is that their education, and to some degree their lives, are impoverished if they have received an education that is so fundamentally deficient," he said.

The report says schools should be freed of Sats and league tables to allow them to make more decisions about what and how they teach.

The compulsory daily act of worship should be reviewed and a curriculum that values knowledge and understanding as well as basic skills should be brought in, it says.

Independent of the government and funded through charitable donations, the review is based on three years of academic research, 29 research papers and dozens of public meetings around the country. It marks 40 years since the last wholesale review of primary education and presents a blueprint for a curriculum that would give teachers control of 30% of their time to teach what they want.

Teaching unions, headteachers and major educational bodies all backed the plans, setting the government on a collision course with schools if it fails to consider the proposals.

The review finds:

• Children are losing out on a broad, balanced and rich curriculum with art, music, drama, history and geography the biggest casualties.

• The curriculum, and crucially English and maths, have been "politicised".

• The focus on literacy and numeracy in the run-up to national tests has "squeezed out" other areas of learning.

• The Department for Children, Schools and Families and the Qualifications and Curriculum Authority, which sets the curriculum, have been excessively prescriptive, "micro-managing" schools.

The review accuses the government of attempting to control what happens in every classroom in England, leading to an excessive focus on literacy and numeracy in an "overt politicisation" of children's lives. Despite this too many children still leave primary school having failed to master the 3Rs.

Sats have also narrowed the scope of what is taught in schools, it claims, concluding: "The problem of the curriculum is inseparable from the problem of assessment and testing."

Christine Blower, acting general secretary of the National Union of Teachers, said the proposals "have depth, credibility and, above all, respond to the realities of the primary classroom".

Mary Bousted, general secretary of the Association of Teachers and Lecturers, said: "Rather than continue to tinker around the edges of primary education we would like the government to heed the proposals and reopen the debate about the purposes of primary education."

The DCSF said the report would be considered by Sir Jim Rose, who has been commissioned to review the curriculum concentrating on "workable recommendations for change ... in order to give teachers more freedom and flexibility".

"Ed Balls [schools secretary] has made it clear that he wants it to be the most fundamental review of the primary curriculum for a decade," the DCSF added. "Sir Jim will publish his findings later this year."