An aggressive pursuit of personal success by adults is now the "greatest threat" to the wellbeing and happiness of children, according to a landmark inquiry.

The belief among adults that the prime duty of the individual is to make the most of their own life rather than contributing to the good of others, is fuelling a range of social ills from family breakdown to premature sexualisation of children and inequality between rich and poor, The Good Childhood inquiry found.

The three-year independent study, compiled by more than 35,000 contributors, produced for the Children's Society, calls for a "significant" change of heart in society.

Members of the panel that drew up the report said they believed children's lives have become more difficult than in the past and that "excessive individualism" lies at the root of this problem.

The "me first" society produces more family discord and conflict, more pressure to own things, excessive competition in schools and "unacceptable" income inequality, the report found. The 11 expert members said "excessive individualism" needed to be replaced by a value system where people seek satisfaction more from helping others than pursuing private advantage.

Bob Reitemeier, chief executive of the Children's Society, said the report was a "wake-up call" for the whole of society.

He said: "Essentially the report brings a taboo into the open which is that we have to confront our selfish and individualistic culture. We need to realise that we are collectively responsible for the welfare of all children and that together we can make childhood better."

Speaking at a news conference to launch the report, Professor Lord Richard Layard, Emeritus Professor of Economics at the London School of Economics, and a member of the inquiry panel, said excessive individualism had filled the vacuum left by a decline in religious belief and social solidarity.

He said: "I think what I would like this report to be remembered for in 20 years' time would be if it helped to turn the tide of excessive individualism. We think that the preoccupation with self is taking too much of the joy out of children's lives, out of their family lives, out of their school, even out of their leisure life and consumption.

"We want the new generation of children, who are learning the importance of contributing to the welfare of others other than themselves, putting human relationships higher relative to possessions and status. In short children should think that it is love that is the most important thing in life."