LONDON (Reuters) — The gap between Britain's rich and poor widened in the 2005-6 financial year, once more frustrating the efforts of the ruling centre-left Labour Party to redistribute wealth, official figures showed yesterday.In the last comparative wealth figures it will issue before Tony Blair leaves office as prime minister, the Office for National Statistics said income for the bottom 10 percent after taxes and welfare benefits fell $10 to $11,374 in the fiscal year that began in April 2005 from the previous year.

This group's income was well under half the national average and less than a fifth of the richest 10 percent, whose average income actually grew by more than $2,000 to $60,908.

In proportion, the figures have barely diverged since Blair, who has said he will quit on June 27, came to office in May, 1997.

In the 1997-8 fiscal year, average final income in the lowest decile was $7,765, less than half the national average of $17,700, with the top 10 percent averaging $41,159, more than five times as much.

A booming financial sector, bumper city bonuses and a decade of strong economic growth have driven wages at the top higher but, despite the introduction of a minimum wage, earnings growth at the bottom has struggled to keep pace.

"The latest evidence suggests that income inequality may be increasing again," the ONS said. "Inequality still remains high by historical standards — the large increase which took place in the second half of the 1980s has not been reversed."

The declining influence of trade unions, higher demand for a skilled, tech-savvy workforce and the emergence of households with two working adults have exacerbated the gap between rich and poor, according to the Institute of Fiscal Studies.

However, the Labour government defended its record of tackling inequality through changes to the tax and welfare system since coming to power ten years ago.

"As a result of reforms to tax and benefits introduced since 1997, households are on average $1,000 ($1,975) better off in real terms this year," a Treasury spokesman said.

"Incomes have grown strongly across the population and the trend of rising inequality, which reached its highest level during the 1980s, has been arrested."

Income before taxes and benefits in the top fifth of British households was 16 times greater than that for the bottom fifth in 2005/6, the Office for National Statistics said.

But after government intervention through tax and benefits the ratio falls to four to one — the same as in the previous year.