German welfare association Der Paritaetische said the number of individuals living on less than 60 per cent of average national income - defined as the poverty level - had reached 19.5 per cent in the east, and 12.9 per cent in the west in 2007.

Both figures marked an increase on 2006, although the report also showed that the proportion of people living below the poverty line had fallen slightly in the southern region - comprising the states of Hesse, Baden-Wuerttemberg and Bavaria.

'Twenty years since the fall of the Berlin wall, Germany is no longer split in two, it's split in at least three parts, and in terms of poverty, more divided than ever before,' said Ulrich Schneider, managing director of Der Paritaetische.

The study showed a clear split between the southern region, with a poverty level of 10.8 per cent, and the northwestern region - including states like Lower Saxony, Hamburg and North Rhine-Westphalia - where it stood at 14.6 per cent.

More than half the firms in Germany's DAX blue chip share index are headquartered in Baden-Wuerttemberg, Bavaria or Hesse, although little more than a third of the population lives there.

A breakdown of the study results showed that the area known as Western Pomerania on the northern border with Poland had the highest poverty level - 27 per cent - compared with just 7.4 per cent in the Black Forest region of southwest Germany.

'If we don't take immediate and decisive action, there will be nothing we can do to prevent whole swaths of the country from completely going to seed,' Mr Schneider said. -- REUTERS