The number of public-sector staff struggling to survive on poverty pay is actually double the figure than previously estimated, research revealed yesterday while MPs mulled over the prospect of a massive 11 per centsalary rise.

The New Economics Foundation (Nef) said one million local authority employees are now living on low wages - equivalent to one in four of the workforce.

It found frozen wages coupled with the soaring cost of living have left public-sector workers £2,000 worse off on average compared with when the Tories took power in 2010.

And Nef senior economist Helen Kersley was clear that councils have made Britain's "low-pay problem" worse by outsourcing 500,000 more jobs to privateers.

Women working in schools and health and social care roles have been hit the hardest and hourly wages for part-time work are now worth the same amount as a decade ago.

A care worker employed in the private sector stands to earn between £6.44 to £7.38 per hour compared with £9 to £11 in the public sector, according to Nef's analysis.

Ms Kersley said: "As local authorities struggle to cut costs, they're leading a race to bottom - commissioning providers that pay workers less than they need to live on."

Unison assistant general secretary Karen Jennings said the report descredited the "damaging stereotype" of overpaid public-sector workers.

She insisted that "instead of bowing down to harmful criticism," the public sector should argue that paying decent wages to workers benefits society and the economy.

Meanwhile separate research by charity Josephy Rowntree Foundation found that there were more working families living in poverty in Britain than non-working ones - the first time every such a balance has been recorded.

Fresh proof of rising in-work poverty was delivered just a day after plans to lavish MPs with an 11 per cent pay rise from 2015.

The Independent Parliamentary Standards Authority (Ipsa) is expected to announce on Thursday that their basic salaries will rise from £66,000 to £74,000.

Some claim pay must rise to prevent a repeat of the 2009 expenses scandal and Ipsa will point out that pensions and "golden goodbyes" will be less generous.

An anonymous survey of 100 MPs by YouGov found last year that Tory MPs believe they deserve over £96,000.

They want Prime Minister David Cameron to back the rise.

The millionaire PM failed yesterday to match Labour leader Ed Miliband's pledge not to accept the extra cash.

Shadow chancellor Ed Balls said the planned rise was "entirely out of any context of the real world.

"How can they possibly be saying we should discuss pay comparability when everybody else is seeing their pay frozen or falling," he told Sky News's Murnaghan programme.

Former front-bench Labour MP Diane Abbott claimed Ipsa's plan "would not arise" if Labour wins the next general election.