Union chiefs want the increase to come in by the autumn of 2004.

It is now time to be bolder and to grasp the opportunity to make it an even more effective weapon against poverty

John Monks, TUC general secretary

TUC general secretary John Monks said it was time for the government to take a bold step and lift more workers out of "poverty pay".

The minimum wage, currently £4.10 an hour, is due to rise to £4.20 an hour in October.

Significant increase

"The introduction of the national minimum wage is one of the Labour government's major successes," Mr Monks said.

"But it is now time to be bolder and to grasp the opportunity to make it an even more effective weapon against poverty."

The decision to press for a £5 minimum hourly rate was made by the TUC's general council.

It said in a statement that the government was right to begin prudently with a rate of £3.70 an hour when the minimum wage was introduced in 1999.

But it said that since a feared rise in unemployment had failed to materialise, it was now time for a significant increase in the rate.

Higher rate might have cost jobs

John Cridland, deputy director general of the employers' organisation the CBI, said: "Increases to the national minimum wage must be carefully thought through."

But he said the CBI would not be naming a level for the hourly rate.

Mr Cridland argued that the minimum wage had been a success so far because it had been set at a prudent level.

He said that had it been set higher it might well have cost jobs.