The gap between the highest and lowest earners has widened since 2000 and most dramatically in London, the TUC says in a report today calling for employers to commit to a "living wage".

Pay inequality intensified across the whole of the UK since the turn of the century after salaries for the top 10% of earners rose faster than for the bottom 10%. The best-paid group were on 3.7 times the pay of the bottom 10%, according to the trade union group's analysis of official data for last year. That compares with a ratio of 3.5 in 2000, equating to a 5% rise in inequality.

The findings follow intense debate over growing inequality in the UK. Last week Oxfam calculated that the country's five richest families own more wealth than the poorest 20% of the population. The TUC said an examination of weekly wages revealed a similar picture of highly-paid staff getting richer compared to those on lower incomes.

Most economists expect wages to pick up over the next year, but early signs are that while salary levels are rising in manufacturing and other areas suffering from skills shortages, lower skilled workers in the service sector are still being offered pay awards below inflation.

The TUC said its study showed that the gap has risen most dramatically in London and the south-east, ahead of the launch of "Fair Pay Fortnight", a campaign urging politicians to put higher living standards at the centre of their pre-election battle plans.

"This growing pay gap is bad news for our economy and bad news for living standards," said TUC general secretary Frances O'Grady.

"The picture is particularly bleak in London and the south-east, but in areas like the Midlands, the north-est and the east of England a significant gulf has developed between top and bottom earners. Unless this trend stops now and more high-skilled jobs with decent pay are created, this worrying pattern is likely to become even more entrenched."

In the capital, the pay inequality ratio was up 14% since 2000. It rose from 4.0 back then to 4.6 last year as gross pay for the top tenth at £81,797 dwarfed earnings the lowest tenth at £17,938. In the south-east, the ratio rose 8.9%, from 3.4 to 3.8.

The TUC is pushing for more commitment from both employers and the government to paying the living wage, a voluntary rate of pay regarded as the minimum to meet the cost of living in the UK. It also wants a crackdown on excessive executive pay and wages councils which could set higher minimum wages where employers can afford to pay more.

"During Fair Pay Fortnight we're asking workers to back our call to MPs to get all political parties to put decent pay at the top of their agendas in the run up to the election," said O'Grady.

The TUC based its analysis on the gross annual pay of full-time employee jobs by region in the Annual Survey of Hours and Earnings (ASHE), published by the Office for National Statistics. The unions group found that after London and the south-east, the biggest rises in pay inequality since 2000 were in the West Midlands and then the East Midlands.

Only in Wales and the south-West was pay inequality down since 2000 while in other regions it was up, but by less than for the UK as a whole.

But the TUC said it believed the changes in Wales and the south-west were "down to top earners not doing as well as in these parts of the UK, rather than those at the bottom getting a better deal."