Antibiotic-resistant bacteria with the potential to cause untreatable infections pose "a catastrophic threat" to the population, England's chief medical officer warns in a report calling for urgent action worldwide.

If tough measures are not taken to restrict the use of antibiotics and no new ones are discovered, said Dame Sally Davies, "we will find ourselves in a health system not dissimilar to the early 19th century at some point".

While antibiotics are failing, new bacterial diseases are on the rise. Although the "superbugs" MRSA and C difficile have been reduced to low numbers in hospitals, there has been an alarming increase in other types of bacteria including new strains of E coli and Klebsiella, which causes pneumonia.

These so-called "gram negative" bacteria, which are found in the gut instead of on the skin, are highly dangerous to older and frailer people and few antibiotics remain effective against drug-resistant strains.

As many as 5,000 patients die each year in the UK of gram negative sepsis – where the bacterium gets into the bloodstream – and in half the cases the bacterium is resistant to drugs.

"Antimicrobial resistance poses a catastrophic threat," said Davies. "If we don't act now, any one of us could go into hospital in 20 years for minor surgery and die because of an ordinary infection that can't be treated by antibiotics. And routine operations like hip replacements or organ transplants could be deadly because of the risk of infection.

"That's why governments and organisations across the world, including the World Health Organisation and G8, need to take this seriously."

There has been an 85% reduction in MRSA (methicillin-resistant Staphylococcus aureus), which has meant that many large, acute hospitals have no more than two or three cases a year. But there are now 50 to 100 cases of gram-negative bacteria infection for every MRSA case, according to Professor Mike Sharland of St George's hospital in London, an adviser to the Department of Health on the use of antimicrobials (antibiotics and antivirals) in children.

"This is your own gut bugs turning on you. Between 10% and 20% are resistant to drugs. We do not yet know why they are on the rise, although some hospital procedures, such as the use of catheters, may be implicated. Many are in the very young or older population," he said.

"There is a lot of work going on through Public Health England and the Department of Health to try to work out why it has suddenly risen." In the second volume of her annual report, Davies calls for politicians to treat the threat of the new bugs and the failing antibiotics as seriously as they did MRSA. She wants action across government departments – involving the Department for Environment, Food and Rural Affairs in particular – because of the use of antibiotics in farming.

She is asking for the threat to be added to the government's strategic risk register, which will make it easier to raise as an issue abroad. Drug resistance is a global problem as the resistant strains of bacteria travel the world.

Multi drug-resistant TB and even some cases of extremely drug-resistant TB (only treatable with difficulty and with last-line antibiotics) have come to Britain.

Antibiotics fail because bacteria develop resistance to the drugs over time. In the decades after the invention of penicillin it did not seem to be a problem because drug companies developed new versions. But no new classes of drugs have been discovered since 1987 and the pipeline has now dried up.

Davies wants to find ways to give the pharmaceutical industry incentives to invest in finding new antibiotics. Most companies have given up because the search has become hard and, because resistance always develops, their lifespan is not long, so there is not much profit to be made.

The sort of incentives that could be offered have not yet been decided, but Davies praised the Innovative Medicines Initiative in Europe, a new public/private partnership. Other recommendations in the report include more education for medical students and qualified staff on the use of antibiotics and encouragement for women to be vaccinated where appropriate in pregnancy, for instance to protect their baby against whooping cough.

The Department of Health said it would shortly publish a five-year action plan to tackle the issues of antibiotic resistance raised in the report, which will include measures to ensure the drugs are prescribed only when they are needed.

Experts warmly welcomed the report. But Richard James, former director of the centre for healthcare associated infections at the University of Nottingham, pointed out that the UK could not solve the problem on its own and global action in countries where antibiotics are over-used, wrongly used and can sometimes – even in southern Europe – be bought over the counter, was vital.

"Anyone reading the report will realise that there are no magic bullets," he said. "The majority of the 17 recommendations relate to actions in the UK alone but there is acknowledgment of the requirement for the UK government to campaign for this issue to be given higher priority internationally."

He suggested exploring the use of a tax on antibiotic use and also measures to encourage the developments of alternatives by small biotechnology companies and universities, such as vaccines.

Laura Piddock, professor of microbiology and deputy director of the institute of microbiology and infection at the University of Birmingham and director of Antibiotic Action, said she was glad Davies was drawing political attention to the antibiotic discovery void.

"However, there are an increasing number of infections for which there are virtually no therapeutic options, and we desperately need new discovery, research and development; the UK is extremely well-placed to do basic discovery and research for new antibacterial molecules," she said.

The Association of the British Pharmaceutical Industry (ABPI) said Davies was right to raise concern. "Antimicrobial resistance is a serious and growing problem," said chief executive Stephen Whitehead, noting the Innovative Medicines Initiative in Europe. "There are, however, pharmaceutical companies actively involved in researching and developing new antimicrobial medicines.

"But more still needs to be done and we believe that for there to be a continual supply of effective antibiotics, a comprehensive review of the R&D [research and development] environment and good stewardship are required urgently."

• This article was amended on 11 March 2013 to clarify that Dame Sally Davies is chief medical officer for England.