Tesco, Britain's largest supermarket chain, was today accused of using slave labour after an investigation found that an Indian textile factory the UK company sources goods from pays staff just 16p an hour.

In the latest row to engulf a British retailer over its overseas suppliers, War on Want, the charity group, alleges Tesco buys clothes from a Bangalore factory where workers can earn less than £7 a week.

On average, textile workers at the factory earn £8.75 for a 54 hour - a six day week.

Today's report follows an intervention by Barack Obama, the Democratic presidential hopeful, who wrote to Sir Terry Leahy to urge the company to engage with US unions representing workers at Fresh & Easy, Tesco's US chain.

War on Want's report will be presented at Tesco’s Annual General Meeting tomorrow by a researcher flown in from India.

Several organisations and high-profile figures will attack the supermarket giant, which made a £2.8 billion profit last year, at the meeting.

Hugh Fearnley-Whittingstall, the TV chef, is putting a resolution about the welfare of Tesco chickens to the AGM.

A Chinese biology professor, Shi Hai Tao, will speak about the treatment of turtles in Tesco’s Chinese stores.

Last week, fashion chain Primark sacked three suppliers in India after a BBC Panorama programme found that they were sub-contracting work to companies which used children for embroidery work.

The Bangalore Garment and Textile Workers’ Union last year calculated a living wage as at least £52 a month – meaning that many of workers are earning less than the living wage.

Investigators said employees at the factory complained that bosses forced them to work overtime or face the sack and they receive only half the extra hours recorded.

Cividep, the labour organisation which conducted the research, said that a doctor they hired found that eight in 10 employees at the factory were malnourished, with large numbers suffering from headaches and anaemia.

Cividep blames the workers' health problems on low pay coupled with increasing rice prices and fast fashion production stress.

It believes that some employees can now only afford smaller meals and often skip lunch, fearing for their jobs if they miss targets.

Simon McRae, senior campaigns officer at War on Want, said: “Our new evidence again reveals how Tesco’s cheap clothing comes at the shameful price of workers’ poverty.

Again and again, scandals exposing UK retailers exploiting garment workers underline that the public cannot trust stores to police themselves. It is high time the British Government legislate to stop this abuse.”

A spokesman for Tesco said: “It’s disappointing that War on Want has once again chosen to publicise unsubstantiated allegations without engaging with us.

"We have been trying to discuss our approach to ethical trading with them but they have ignored our calls. Now, out of the blue, they make these allegations without producing any evidence or giving us any detail on the factories they claim have problems. This means we cannot investigate.

“We insist on high standards and go to great lengths to ensure our suppliers meet them.”

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