Slum-dwellers who make up a third of the world's urban population often live no better - if not worse - than rural people, a United Nations report says.
Anna Tibaijuka, head of the UN Habitat agency, urged governments and donors to take more seriously the problems of at least a billion people.
Worst hit is Sub-Saharan Africa where 72% of urban inhabitants live in slums rising to nearly 100% in some states.
If no action is taken, the world's slum population could rise to 1.4bn by 2020.
More than one billion people live in slums now.
Habitat - the UN's human settlements programme - is hosting an Urban Forum in Vancouver next week on how to stem the crisis.
Its report is billed as a ground-breaking survey of urban growth, making a clear distinction between slum and non-slum development for the first time in UN history.
According to Dr Tibaijuka, speaking to reporters in London, slum-dwellers suffer a double disadvantage: they both live in misery and their plight often goes unreported given the traditional focus on the rural poor in the developing world.
"The average aid worker is not aware of the extent of the problem - this report is the proof," UN Habitat's executive director added.
Some states, the report notes, have already taken significant action to improve conditions, notably in Latin America where about 31% of urban people are classified as living in slums (figures for 2005) - down from 35% in 1990.
Such progress is welcomed as part of the UN's Millennium Development Goal of achieving a significant improvement in the lives of at least 100 million slum-dwellers by 2020.
Among the report's findings:
FIVE CHIEF FEATURES OF A SLUM
Upgrade and prevent
A slum is defined by UN Habitat as a place of residence lacking one or more of five things: durable housing, sufficient living area, access to improved water, access to sanitation and secure tenure.
"People move to the cities not because they will be better off but because they expect to be better off"
However, the growth in slums is unprecedented, Habitat finds, and the nature of the problem has also changed.
Of the urban population of South Asia, 57% live in slums though this is down on the 1990 figure of nearly 64%.
Dr Tibaijuka told journalists that urbanisation in itself was not the problem as it drove both national output and rural development.
"History has shown that urbanisation cannot be reversed," she continued.
"People move to the cities not because they will be better off but because they expect to be better off."
The only effective way to upgrade slums and prevent new ones emerging, she said, was to persuade governments to improve infrastructure.
While help from international donors was required, she also argued that governments could take relatively cost-free action such as reforming property laws.
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