The Children's Secretary and Normanton MP, right, has distanced himself from a statement released by his department which said a living wage was unnecessary and could cause a rise in inflation.

The statement infuriated the Fair Pay Network (FPN) – a coalition of anti-poverty charities including Oxfam, the Child Poverty Action Group and the Trades Union Congress (TUC) – who called it "extremely disappointing."

The FPN aims to make Leeds a "fair pay city" in a campaign backed by Kaiser Chiefs guitarist Andrew White, Leeds Rhinos rugby star Kevin Sinfield and Coun Keith Wakefield, leader of the city council's opposition Labour group.

Research indicates a living wage would be around £6.50 an hour in Leeds.

The current national minimum wage is £5.73 an hour for workers aged 22 and over.

London Mayor Boris Johnson guaranteed staff employed by the Greater London Authority and Transport for London a minimum of £7.45 an hour.

But a statement drafted by a number of Whitehall departments and released by the Department for Children, Schools and Families said: "An artificial 'living wage for London' could distort labour markets and prove poor value for money.

"In seeking to reflect perceptions of the cost of living, it could raise inflation expectations when increased vigilance is needed on inflationary risks."

Sources told the YEP the statement was released without the approval of any Government ministers.

And Mr Balls stressed that his own department is introducing a London living wage for its employees next year.

"In fact the minimum wage plus tax credits means a guaranteed weekly income of around £300 or just under £8 an hour for a family with one child and one full-time worker," he said.

"I also welcome employers who choose to build on the minimum wage and do more to improve support for low- paid workers. This should be encouraged here in Leeds as well as London."

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