Mathematics is in a "spiral of decline", with major reforms of A-levels and GCSEs needed to improve the situation, academics say.
The UK is suffering a maths skills shortage, the report says
A report from the UK Mathematics Foundation says the situation is "far more serious" than is usually admitted.
There were far too few numerically trained workers to teach their successors, while A-level entries had declined sharply since the 1980s.
But the government said it was making "good progress" on improving standards.
'Nail in coffin'
The foundation found that A-level maths entries in the UK had fallen from around 85,000 in 1989 to 54,000 in 2002, which it called "disastrous".
Changes brought in in England in 2000, which divided A-levels into two separate parts - divided into modules - had been the "most recent and most public nail in the coffin" of decline.
They had made it "impossible to teach and to assess mathematics in an integrated way", making the subject "less appetising".
The report also described a need to "revive" teaching of the subject to able pupils aged 11 to 16.
The current system of "acceleration", where more gifted children move ahead of their classmates, had "made the problem worse".
It had meant less focus on the "elementary" aspects of maths, which were important to know when moving on to A-level.
The report advocates a "more appropriate" curriculum for the top 25% of pupils, which takes this into account.
The knock-on effect of government policy had been damaging.
UK mathematics - the part of the population using the subject to a reasonable level as part of its everyday work - was no longer able "to supply the bulk of its core needs", with a decline in the number of teachers.
Governments over the last 15 years had "allowed the resulting vacuum to be filled to some extent by imported talent".
The report added: "In an era where power and wealth increasingly derive from 'intellectual property', the UK is in danger of becoming totally dependent on imported intellect."
The failures at lower levels had affected universities, to the extent that it was "increasingly hard to recruit secondary mathematics teachers with A-level mathematics, let alone with a good mathematics degree".
A Department for Education and Skills spokeswoman said: "No government has done more to get the basics right in our schools.
"Standards in maths are rising with last summer's test and exam results showing good progress. In 2004 maths had the the highest entry rate of any GCSE and the third highest entry rate at A-level."
She added: "Vacancies for maths teachers have declined every year since 2001 and to boost recruitment further, graduates from 2006 will be offered a £9,000 bursary and £5,000 'golden hello' to train as maths teachers."
The government was also establishing a national centre of excellence in the teaching of maths.
The report - Where will the Next Generation of UK Mathematicians come from? - is based upon the findings of a seminar of mathematicians co-hosted by Manchester University.