The gap between rich and poor in London is so stark that rates of obesity, teenage pregnancies and mental illness in Hammersmith and Fulham could be more than halved if there was greater equality in the capital, according to a campaign group.

The Equality Trust says research carried out by the London Sustainable Development Commission shows the richest 20 per cent of the population is seven times more well off than the poorest, a far greater disparity than in Japan and Sweden, where the wealthy are four times better off than the poor.

And the trust says that, were London more in line with those countries, obesity in Hammersmith and Fulham would half, mental illness would reduce by more than 50 per cent and teenage pregnancy by more than three quarters.

Labour MP Andy Slaughter believes a major contributor to inequality is down to housing, and he claimed Hammersmith and Fulham Council's housing policy means the gap is likely to remain wide.

He said: "A lot of problems come out of poor housing and every day I meet people who are living in damp, overcrowded conditions. This can have an impact on all aspects of life – health, mental health, and kids' education.

"Even though there is money to build housing, the local authority is not doing so and the consequence is you have got a big waiting list.

"There is a microcosm in Hammersmith and Fulham and what we need to do is develop new housing and new services."

The Equality Trust's figures reveal 20 per cent of the borough currently has some form of mental illness, the fifth highest rate in London.

It has one of the lowest obesity rates in the capital at under 15 per cent and just under 30 out of every 1,000 teenagers aged between 15-17 is getting pregnant.

Report authors Professors Kate Pickett and Richard Wilkinson say greater equality would mean life getting better for both rich and poor.

Prof Pickett said: “We worked out how much life could improve for Londoners if the incomes of rich and poor were closer together in the UK. Not only is life better for poorer people, even the rich benefit, for example from higher life expectancy, better mental health, and lower crime rates.”

A spokesman for the council said Mr Slaughter's claims housing was the main factor in perceived borough inequality were 'nonsense', saying it is planning to build 3,250 homes in the next decade.

The spokesman added: "We are committed to creating a borough of opportunity by giving people access to the best possible schools, creating job opportunities for local people and creating mixed and balanced communities by building low-cost family homes.”