One in seven children is growing up homeless or in "bad" housing, housing charity Shelter claims.
Bad housing can have a detrimental impact on children's lives
Shelter says 1.6 million youngsters in Britain are living in housing judged to be temporary, overcrowded or unfit.
The charity, which is marking its 40th anniversary, described the situation as a "scandal".
Shelter was set up after BBC drama- documentary Cathy Come Home was screened, an anniversary being marked by the No Home season of programming.
In its report, Against the Odds, Shelter analyses existing government statistics and calls on Chancellor Gordon Brown to provide the funding to build more "vital" social housing.
Shelter chief executive Adam Sampson said: "It's a scandal that 40 years after the plight of Cathy Come Home's on-screen family shocked the nation, the lives of 1.6 million children are today being devastated by the grim reality of homelessness and bad housing.
"It's vital that the chancellor commits to funding 20,000 extra social homes each year to give these children a fair start in life."
Shelter said living in poor housing had a significantly detrimental impact on children's lives.
It said that in England, children in bad housing were twice as likely to leave school with no GCSEs.
More than 40,000 young people aged 16 to 18 who lived in poor accommodation in England had no GCSEs, it said.
And it said almost 310,000 children living in bad housing in Britain were suffering long-term illness or disability.
It also said that compared with other children, youngsters in poor accommodation were twice as likely to be persistently bullied and had almost double the chance of suffering from poor health.
Each year, more than 57,000 children living in bad housing in Britain are excluded from school, the report also said.
Housing Minister Yvette Cooper responded to the findings by saying: "We need to build more and better homes for our children."
She added: "We have already lifted almost one million children out of bad housing through investment in social homes and we now have one of strongest safety nets to tackle homelessness in Europe, if not the world.
"But we need to go further to provide the decent homes that our families and children need."
She said the government, in an attempt to address the problem, was setting out new planning reforms to build more homes, especially family homes.
'Wall of Shame'
"For the first time, the planning system will have to identify and meet the housing needs of children," said the housing minister.
To mark the publishing of the report, Shelter is unveiling a 30-metre 'Wall of Shame' on London's South Bank and the public are being invited to sign a brick to show their support for the protest against bad housing.
Ken Loach's hard-hitting drama-documentary Cathy Come Home was broadcast on BBC One in 1966 and dealt with a young woman's slide into homelessness and poverty.
The television play was watched by 12 million people and changed the way people thought about homelessness. Shortly after the broadcast Shelter was launched.
The BBC's No Home season, featured across BBC TV, radio and online outlets, highlights ways the public can help homeless people.